Unless Apple’s next generation fo smartphones set off a new wave of excitement, the smartphone industry faces years of slow growth with Android still dominating operating systems. As of now, IDC doesn’t see a first-ever sales decline – yet.
“The big inflection point that everyone is watching for is when the smartphone market experiences its first year-over-year decline,” says Ryan Reith, program vice president with IDC’s Worldwide Quarterly Mobile Device Trackers.
“We believe the two main catalysts for continued growth are bringing first-time users onto a smartphone and maintaining life cycles that are close to two years. At the end of 2016, we estimated that about half of the world’s population was using a smartphone, which leaves plenty of room for additional first-time users. And, despite very high saturation levels in mature markets like North America, Western Europe, Korea, and Japan, we still see the majority of users replacing their handsets roughly every two years. We expect these trends will hold through the forecast.”
Yes, smartphone sales will continue to grow over the next five years – but at a very much slower rate than in recent years, according to research firm IDC.
The firm forecasts that 1.7 billion smartphones will be shipped in 2021 compared to 1.47 billion in 2016.
That figures out to an average growth rate of 3.3 percent over the five years.
- Most people won’t buy new iPhone
- Phablets a bright spot for smartphone industry
The slow growth mirrors the 2.5 percent increase of 2015, which was the first ever single-digit growth spurt for smartphones, IDC says.
Android is expected to keep marketshare dominance at 85 percent with Apple iOS a distant second at under 15 percent. “Others” make up the remainder.
As summed up by IDC:
- Android: The Android OS continues to dominate on a global level and IDC expects shipments on the platform to slightly outperform the market with 2.3% year-over-year growth in 2017. In terms of volume, Asia/Pacific (excluding Japan) continues to lead the way consuming nearly 55% of shipments throughout the forecast period. Growth at the high end from brands such as OPPO, Vivo, and Huawei have also led to a 17% increase in average selling price (ASP) within the region, showing that the high end has more room to grow. Android ASP’s have also risen in other big markets like Latin America, the United States, and Western Europe. With many brands opting to push premium phablet offerings to combat the likes of the larger iPhone, devices with screen sizes larger than 5.5 inches should grow 34.5% year over year in 2017 with ASPs growing 9.2% as a result.
- iOS: Apple is expected to demonstrate nominal 1.5% year-over-year growth in 2017 despite the steadily growing hype around the September iPhone launch. This is a considerable improvement from the 7% decline in iPhone shipments in 2016. From there, things only get better for Apple as IDC anticipates the arrival of the iPhone 8 will spur a major upgrade cycle come 2018. Despite the new device launching later this year, IDC expects a majority of the shipments are likely to land early in 2018. IDC projects 9.1% growth in 2018 with the iPhone 8 and the new 7S/7S+ models playing a pivotal part in the near double-digit growth next year.