The worldwide smartphone market will begin to rebound this year after struggling through a brutal 2016, according to a new forecast from IDC.
Global smartphone shipments grew by 2.5% year over year in 2016, IDC said, marking the lowest growth the industry had ever experienced. The market will grow by 3% this year, reaching 1.52 billion units shipped, and will expand 4.5% in 2018 due to improving economic conditions in some emerging markets as well as sales of an expected new iPhone from Apple later this year.
“2016 was an interesting year for smartphones with some high-growth markets down and other mature markets like the U.S. and China outpacing global growth rates,” said Ryan Reith, program vice president with IDC’s Worldwide Quarterly Mobile Device Trackers, in a press release. “Looking ahead, we continue to believe several factors will enable the smartphone market to regain some of its momentum. First and foremost is that less than half the world’s population is currently using a smartphone, and markets like the Middle East and Africa, Central and Eastern Europe, and Southeast Asia still have plenty of room to grow.”
Reith also said increased mobile data consumption from gaming as well as augmented and virtual reality will drive smartphone sales as users upgrade from less expensive devices.
And Apple is poised to enjoy an increase in iPhone sales through 2018 after seeing its first-ever drop-off in shipments of its iconic handset. IDC predicted iPhone shipments will grow by 3.8% this year and will continue to build momentum heading into next year.
“IDC slightly lowered its 2017 projections for Apple in this forecast to 223.6 million, while increasing its 2018 volumes to 240.4 million,” the forecast said. “All signs point to late 2017 and certainly 2018 being very strong for Apple as much of its installed base seems ready for a refresh and the next round of iPhones is not likely to disappoint its fans.”
Microsoft’s Windows Phone, however, will continue its fade to black, IDC predicted. Windows Phone shipments will plummet 81% this year to just 1.1 million units, “leaving little hope of mounting a full-scale comeback in the years to come.”
The U.S. smartphone market has struggled in recent quarters as penetration rates have reached the saturation point. Shipments declined by 4% year over year in the first quarter of 2017, according to Strategy Analytics, underscoring stalled demand as upgrade cycles continue to slow. But a wave of new, high-end handsets from Samsung, Apple and Andy Rubin’s Essential—which was unveiled earlier this week—may breathe new life into a market gasping for air.