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According to a recent forecast update from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, 2015 is likely to be the last year of double-digit smartphone growth.
The 2015 calendar year finished with 1,44-billion smartphone shipments worldwide, which were up 10,4% over 2014. IDC’s most recent projections show 2016 shipments of 1,5-billion, or 5,7% growth over 2015.
The trend of single-digit year-over-year growth is expected throughout the forecast with volumes growing to 1,92-billion in 2020. The market will continue to see volumes shifting to the low end with the aggregate market average selling price (ASP) dropping from $295 in 2015 to $237 in 2020.
From a regional standpoint, mature markets like the US, 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,” says 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.”
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,” says 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.”
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.
IDC’s top-line projections did not change much from the previous forecast with expectations that Android shipments will grow from 1,17-billion in 2015 to 1,62-billion in 2020 and its share of the smartphone industry will grow from 81% to 85%. The biggest volume opportunity for Android is clearly within the low-cost space, and in 2015 only 14% of Android shipments were $400 or greater. This in itself poses the biggest challenge for Android OEMs as the margins on these low-cost devices are thin at best. At the same time, the competition within this segment continues to increase as new local vendors continue to pop up in many high-growth markets.
In terms of iOS, 2015 was a tremendous year for Apple and the iPhone as shipments hit a new record of 231,5-million for growth of 20.2% over 2014, which was nearly double that of the overall smartphone market. More importantly, Apple was able to grow its ASP from $663 in 2014 to $713 in 2015. The continued upgrades to the newer, pricier iPhones were the primary catalyst for increasing ASPs at a time when the majority of the market is chasing low-cost models. IDC expects 2016 to be relatively flat regarding iPhone volume. However, growth should return in 2017 and beyond as its trade-in programs will expand into markets outside of North America and help drive churn.
This past year was another challenging one for Windows Phone as shipments were down 18% in 2015 to 11,1-million units with roughly 95% of that volume coming from Microsoft (or Nokia) branded devices. The recent MWC conference in Barcelona showed a few new products from partner OEMs although it remains unclear how serious the Windows Phone offerings will be from OEMs.