Dear Visitor,

Our system has found that you are using an ad-blocking browser add-on.

We just wanted to let you know that our site content is, of course, available to you absolutely free of charge.

Our ads are the only way we have to be able to bring you the latest high-quality content, which is written by professional journalists, with the help of editors, graphic designers, and our site production and I.T. staff, as well as many other talented people who work around the clock for this site.

So, we ask you to add this site to your Ad Blocker’s "white list" or to simply disable your Ad Blocker while visiting this site.

Continue on this site freely
  HOME     MENU     SEARCH     NEWSLETTER    
CUSTOMER RELATIONSHIP MANAGEMENT NEWS. UPDATED ABOUT A MINUTE AGO.
You are here: Home / Mobile Industry News / IDC Predicts Smartphone Slowdown
IDC Predicts First Smartphone Industry Downturn
IDC Predicts First Smartphone Industry Downturn
By Jennifer LeClaire / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
DECEMBER
04
2015
This has never happened before. The global smartphone market is posting its first single-digitl growth year on record. That’s according to the latest Worldwide Quarterly Mobile Phone Tracker from market research firm IDC.

The firm predicts worldwide shipments will grow 9.8% to hit 1.43 billion units this year, thanks in part to growth in Latin America, Western Europe, and the Asia Pacific. The slower-than-expected growth actually signifies an industry downturn.

And that’s not the worst of the bad news for smartphone makers. That slowing growth is going to get even slower through 2019, IDC predicts, due largely to lower Windows Phone sales, as well as fewer sales of phones running platforms outside Android, iOS, and Windows Phone.

All Eyes on China

With the smartphone market finally slowing to single-digit growth, Ryan Reith, a program director with IDC's Worldwide Quarterly Mobile Phone Tracker, said maintaining momentum will depend on several factors. The main driver, he said, has been and will continue to be the success of low-cost smartphones in emerging markets.

“This, in turn, will depend on capturing value-oriented first-time smartphone buyers as well as replacement buyers,” Reith said. “We believe that, in a number of high-growth markets, replacement cycles will be less than the typical two-year rate, mainly because the components that comprise a sub-$100 smartphone simply do not have the ability to survive two years. Offering products that appeal to both types of buyers at a suitable price point will be crucial to maintaining growth and vendor success."

All eyes in the smartphone industry are on China. Because of the sheer size of the market, the economic slowdown in the Asian nation is putting a damper on global growth. But IDC argues that China is mainly a replacement market with low single-digit impacts on the broader industry. Meanwhile, the Middle East will see 50 percent year-over-year growth, passing historically strong markets like Indonesia and India.

The Vendor Push

Anthony Scarsella, a research manager with IDC's Mobile Phones team, expects consumers to migrate toward affordable high-value handsets and financing options on pricier models. He predicts handset makers will try to push device financing and trade-in options across many of the developed markets as growth in these markets is expected to primarily come from replacement purchases and second devices.

“Apple has taken the lead with its iPhone Upgrade Program, and several other vendors are expected to implement similar plans in the months ahead,” Scarsella said. “These plans could represent the most effective way to get flagship devices into the hands of consumers while speeding up the upgrade cycle through trade-in and incentives."

Looking at mobile operating systems, IDC bets Android’s market share, which currently sits at 81 percent, will rise to 82 percent by 2019. Apple’s iOS has climbed to 7.6 percent of the market and IDC’s forecast calls for the operating system to hover at the 14 percent to 15 percent range, seeing boosts around product launches.

As for Windows Phone, IDC is not bullish. Microsoft has pressed hard on all fronts, but the operating system isn’t gaining much traction. Specifically, IDC predicts a 10 percent year-over-year decline in 2015, and, more losses in 2016 due to a lack of OEM partner support.

U.S. Slippage

We caught up with Roger Entner, a principal analyst at Recon Analytics, to discuss his take on the outlook. He told us he predicted earlier this year 129.2 million handsets in the U.S. would ship.

At this point, he’s predicting 128.1 handsets through the end of the year compared to 128.7 million handsets in 2014. So that’s negative growth stateside.

"The reason [for negative growth] -- at least in the U.S. -- is equipment installment plans." They are the culprits. "The two-year upgrade cycle has been broken and the vast majority of the people who used to buy a phone at the two-year price point are now buying one when it breaks," Entner said. "There’s only a slight increase in the number of people who buy a phone every single year. That leads to a lengthening of the upgrade cycle and fewer phones being sold."

Read more on: Smartphone, Windows, Mobile, IDC
Tell Us What You Think
Comment:

Name:

Like Us on FacebookFollow Us on Twitter
MORE IN MOBILE INDUSTRY NEWS
CRM DAILY
NEWSFACTOR NETWORK SITES
NEWSFACTOR SERVICES
© Copyright 2017 NewsFactor Network. All rights reserved. Member of Accuserve Ad Network.