Smartphone growth expected to drop to single digits in 2016: Report

NEW DELHI: Smartphone shipments will grow 5.7 percent year-on-year to 1.5 billion in 2016, with 2015 likely being the last year of double-digit smartphone growth, according to a report by International Data Corporation (IDC).

The trend of single-digit year-on-year growth is expected throughout the forecast with volumes growing to 1.92 billion in 2020.

"The 2015 calendar year finished with 1.44 billion smartphone shipments worldwide, which were up 10.4 percent over 2014. The market will continue to see volumes shifting to the low end with the aggregate market average selling price (ASP) dropping from USD 295 in 2015 to USD 237 in 2020," the survey said.

From a regional standpoint, mature markets like the United States, China, and Western Europe all hit single digit growth in 2015, while high growth markets such as India, Indonesia, the Middle East and Africa, and other pockets in Southeast Asia, all remained healthy.

"The mature market slowdown has some grave consequences for Apple, as well as the high-end Android space, as these were the markets that absorbed the majority of the premium handsets that shipped over the past five years," said Ryan Reith, Program Director with IDC's Worldwide Quarterly Mobile Phone Tracker.

"I believe Apple's move into the trade-in business with its 'Trade Up with Installments' program is aimed at further increasing churn in some of its most lucrative markets despite the high penetration rates. By entering this space, Apple can more tightly control the trade-in offerings, as well as monitor the demand for where these perfectly functioning 1-year old iPhones end up. The latter is just as important as the trade-in location as it will give Apple a strong pulse on areas of high demand but perhaps less disposable income," said Reith.

With an abundance of new devices across multiple operating systems and price points expected to arrive in 2016, the one thing that can be assured is that many of these devices will continue to sport larger screens.

"Consumers are still migrating upstream with regard to device size as phablets continue to grow in popularity," Anthony Scarsella, Research Manager with IDC's Mobile Phones team.

"Phablets now account for 20% of all smartphone volumes in 2015, with expectations that volumes will grow to 32% in 2020 or 610 million shipments," said Scarsella.

Android phablet percentages are generally in line with the 20% to 32% as noted above, and expectations for Apple is that its phablet devices – currently the iPhone 6 Plus and 6S Plus – will grow from 26% in 2015 to nearly 31% in 2020.