The growth of the smartphone sector has been in question for quite some time now. Now, a new Gartner report highlights that the global smartphone sales will slow down in 2016 and no longer grow in double digits. “The smartphone market will no longer grow at the levels it has reached over the last seven years,” said Anshul Gupta, research director at Gartner. “Smartphone sales recorded their highest growth in 2010, reaching 73 percent.”
As pointed out earlier, the worldwide smartphone sales is expected to grow 7 percent in 2016 and reach 1.5 billion units, which means a fall from 14.4 percent growth in 2015. In 2020, smartphone sales will pace to total 1.9 billion units, adds the report.
It points out slowing replacement of phones to be one of the reasons. The smartphone market has reached 90 percent penetration in the mature markets of North America, Western Europe, Japan and mature Asia/Pacific, which users in these regions are not replacing or upgrading smartphones as often as seen in previous years. “In the mature markets, premium phone users are extending life cycles to 2.5 years, which is not going to change drastically over the next five years,” said Gupta.
As mature markets are saturated, the main focus of many vendors is on India and China. “India has the highest growth potential,” said Gupta. “Sales of feature phones totaled 167 million units in 2015, 61 percent of total mobile phone sales in India.”
Though smartphones are expensive for users in India, the falling average selling prices (ASPs) of low-end models means 139 million smartphones will be sold in India in 2016, growing 29.5 percent year over year, believes Gartner. ASPs of mobile phones in India remain under $70, and smartphones under $120, which will continue to contribute around 50 percent of overall smartphone sales in 2016.
After 16 percent growth in 2014, smartphone sale in China went flat in 2015. “In this saturated yet highly competitive smartphone market, there is little growth expected in China in the next five years,” said Annette Zimmermann, research director at Gartner. Sales of smartphones in China represented 95 percent of total mobile phone sales in 2015. Similar to India, falling ASPs for smartphones will make them more affordable for users.”
“The worldwide smartphone market remains complex and competitive for all mobile phone vendors, and we are not expecting the vendor landscape to get smaller,” said Zimmermann. “In such a fluid vendor landscape, some will exit the market while newcomers, including mobile manufacturers or internet service providers from China and India, could make their debut.”
Gartner predicts that by 2018, at least one non-traditional phone maker will stand among the top five smartphone brands in China. “Chinese internet companies are increasingly investing in mobile device hardware development, platforms and distribution as they aim to grow their user bases and increase user loyalty and engagement,” concluded Zimmermann.
