IDC: iPhone shipments to slide 2% this year as worldwide smartphone market slows to a crawl

IDC predicted worldwide smartphone shipments will grow at a sluggish 3.1 percent clip in 2016, revising a previous forecast that had pegged the market to grow at 5.7 percent this year.

Shipments are expected to hit 1.48 billion in 2016 and grow to 1.84 billion in 2020, IDC said. Smartphone shipments enjoyed 10.5 percent growth in 2015 and 27.8 percent in 2014.

IDC lowered its forecast due to the continued slowdown of smartphone sales in mature markets and China. The U.S., Western Europe and China will see "low single digit growth rates" this year, the firm said, while Japan will contract by 6.4 percent and Canada will shrink by 6.9 percent.

"Consumers everywhere are getting savvy about how and where they buy their smartphones, and this is opening up new doors for OEMs and causing some traditional channels to lose some control of the hardware flow," said Ryan Reith, program vice president with IDC's Worldwide Quarterly Mobile Phone Tracker, in a press release. "Smartphones sold into eTailer channels grew 65 percent in 2015 and are expected to account for roughly 12 percent of smartphone shipments in 2016, up from just 4 percent in 2013. Consumers are having more say over which brands they want and at the same time able to bargain shop."

Consumers are holding on to their handsets longer as operators move away from contracts and toward equipment installment plans (EIPs) and leasing programs. IDC said early trade-in programs and a broader range of cheap unlocked devices "will play a significant role in keeping mature market life cycles close to two years."

"Despite single-digit growth for the overall smartphone market throughout the forecast period, Phablets (devices with 5.5-inch screens and larger) are expected to have double-digit growth until 2019, then slowing to 9.2 percent growth in 2020," IDC Research Manager Anthony Scarsella said in the announcement. "We are witnessing a plethora of vendors shifting their flagship devices towards the Phablet category as the average selling price for a Phablet will remain significantly higher than a regular smartphone ($383 vs. $260 in 2016) through the forecast period."

IDC also predicted Android's dominance in the world of mobile operating systems will continue to grow as the price of handsets falls. Shipments of the iPhone are expected to decline 2 percent in 2016 from last year, marking "a pivotal moment" for Apple. But iPhone shipments could grow again next year and beyond, IDC said, "supported by its early trade-in program as well as the lower-cost iPhone SE." Apple also continues to gain traction in China, according to IDC.

For more:
- read this IDC press release

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