International Data Corporation (IDC) cut its 2016 smartphone shipment growth forecast nearly in half Wednesday, revising its estimate to just 3.1 percent on the basis of a continued slowdown in mature markets. The new estimate is 2.6 percent percentage points lower than its previous forecast of 5.7 percent growth in 2016. The figure highlights a sharp decline in the smartphone market, which already dropped from 27.8 percent growth in 2014 to just 10.5 percent growth in 2015. IDC said smartphone shipments are expected to total just 1.48 billion in 2016 and grow to 1.84 billion in 2020. The firm said low single-digit grow this expected in large, mature markets like the United States, Western Europe and China. IDC said Japan and Canada will also see their growth rates contract by 6.4 percent and 6.9 percent, respectively. IDC said part of the slowdown has come from a change in buyer behavior that has resulted in longer device life cycles. “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. “Consumers are having more say over which brands they want and at the same time able to bargain shop.” According to IDC, one type of device is expected to have some success despite the slowdown: Phablets. IDC said phablets, or devices with screens 5.5 inches or larger, are expected to see double-digit growth until 2019 before slowing to 9.2 percent growth in 2020. “Vendors continue to push larger screened devices at a variety of price points that feature big bold displays as well as powerful multimedia capabilities in both mature and developed markets,” IDC’s Mobile Phones team research manager Anthony Scarsella said. “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.” By platform, Android is expected to dominate, with a forecast of 6.2 percent growth and a total of 1.24 billion shipments in 2016. IDC said Android’s shipment market share will rise from 81 percent last year to 84 percent in 2016 as Apple shipments are expected to drop from 232 million in 2015 to 227 million this year. Despite a projected slide of 2 percent, IDC said it believes Apple can return to iPhone growth in 2017 on the strength of its early trade-in program, lower cost iPhone SE and potential growth and penetration in the Chinese and Indian markets. Following the phablet trend, shipments of the iPhone 6 Plus and 6S Plus are expected to grow as a portion of all iPhones shipped from 26 percent in 2016 to 36 percent in 2020, IDC said.
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