Global Smartphone Growth to Plummet

June 14, 2016

By J. Sharpe Smith

Senior Editor
AGL eDigest

Smartphone shipments growth is expected to dive to 3.1 percent in 2016, down from the 10.5 percent growth in 2015 and 27.8 percent in 2014, according to a forecast update from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker.

The new forecast is 2.6 percentage points lower than IDC’s previous forecast for 2016 on the basis of the continued slowdown in mature markets and China.

IDC expects large markets like the United States, Western Europe, and China to see low single digit growth rates in 2016 while Japan and Canada are expected to contract by 6.4 percent and 6.9 percent, respectively.

“In all these markets, smartphone buying behavior is changing in many ways. In operator-driven markets the transition away from two year subsidized contracts toward monthly installment plans are slowly taking place,” said Ryan Reith, program vice president with IDC’s Worldwide Quarterly Mobile Phone Tracker. “Meanwhile, many retail heavy markets are seeing a surge in the eTailer channel, better known as online marketplaces.

Gartner also Points to Smartphone Sales Slowdown in 2016

Although not quite as drastic as IDC’s forecast, Gartner forecasted worldwide smartphone growth to drop to 7 Percent in 2016 down from 14.4 percent growth in 2015. Smartphone sales growth was at its highest, 73 Percent, just six years ago in 2010.

Gartner said global smartphone sales will never go back to double digit growth. “The smartphone market will no longer grow at the levels it has reached over the last seven years,” said Roberta Cozza, research director at Gartner.

Another reason the for the slowdown is the 90 percent penetration rate achieve in the mature markets of North America, Western Europe, Japan and Mature Asia/Pacific, and the extended life cycles of the phones.

In its latest update to its 2016 IC Market Drivers Report, IC Insights notes slowing in the Chinese smartphone market in 2015 and early 2016. The top two suppliers, Samsung and Apple, are each expected to see a decline in smartphone shipments this year, one percent and three percent, respectively.

“There will be very little middle ground with regard to smartphone shipment growth rates among the top 12 suppliers this year,” according to the 2016 IC Market Drivers Report. “Seven of the top twelve companies are forecast to register 2016 growth rates of 6 percent or less while the other five companies (Huawei, Oppo, Vivo, Meizu, Micromax) are expected to each log 29 percent or better increases. Further illustrating the maturing of the smartphone market,

Expected to drop out of the top 12 ranking this year are Japan-based Sony, U.S.-based Microsoft and China-based Coolpad, according to IC Insights.

Smartphone Growth Declines Should Have No Impact on Infrastructure

The need and growth of wireless infrastructure will not be impacted by drop in growth of smartphones, according to Jake MacLeod, principal, Graybeards Consulting.

Given the large existing base of smart phones (the denominator) the statistical percentage increase will naturally decrease over time. There will continue to be extraordinary demand for voice, video and data via smart devices for the foreseeable future.