Smartphone Shipment Growth Rate To Decline To 5.7 Percent This Year

According to market research firm IDC, the growth rate of smartphone shipments in the world is expected to decrease to 5.7 percent in 2016. This is a far cry from the 10.4 percent increase that global smartphone shipments posted in terms of growth rate in the previous year. This is a further sign that worldwide, the market for smartphones are indeed slowing down.

This could mean a challenging series of months ahead for phone makers such as Samsung and Apple. Last year, mature smartphone markets such as the United States, China, and Western Europe were already beginning to register single digit growth for smartphone shipments. In the meantime, smartphone markets in India, Indonesia, the Middle East, and Africa, have shown better growth rates than those in mature markets.

Recently, there has been much talk about a so-called iPhone fatigue, but based on what IDC is forecasting, it is more like smartphone fatigue all around the world. Consumers, especially those based in mature markets, simply do not see any need to purchase new smartphones. Industry watchers are saying that the reason for this is that the new smartphone models being introduced just do not offer anything new or exciting to get people to buy new handsets, preferring instead to stick with their current devices. Moreover, various wireless carriers are starting to get rid of subsidized smartphone plans, encouraging more consumers to purchase their handsets at the full retail price. And not many people want to spend that much for today’s pricey smartphone models.

Apart from predicting slower growth rate for smartphone shipments worldwide, IDC also took the opportunity to offer other forecasts. The market research firm believes that consumers will continue to go for phablets (smartphones with large display screens). Per IDC’s estimates, phablets made up 20 percent of all smartphone shipments in 2015. By the end of this decade, that number will likely increase to 32 percent for phablets powered by Google’s Android mobile operating system, and to 31 percent for iPhones with big display screens. 

Manufacturers of Android devices may do well to start selling smartphones with affordable prices. Last year, only 14 percent of Android devices were priced at $400 or higher, which means that the remaining 76 percent all belong squarely in the low cost smartphone category. Furthermore, IDC is expecting Android’s market share to increase to 85 percent by the end of this decade, from 81 percent market share it enjoyed in 2015. In general, smartphone shipments will likely grow from 1.44 billion units in 2015 to 1.5 billion units in 2017 and then to 1.9 billion units in 2020.