2016 Brings Flat Smartphone Market, Research Says

Across the globe, smartphone shipments are anticipated to hover below 1.5 billion units with an almost flat annual growth rate. According to International Data Corporation’s WorldWide Quarterly Mobile Phone Tracker, the smartphone market will only grow by 1.6 percent year-over-year, which is down from 10.4 percent in 2015.

IDC, which provides market forecasts for technology companies across the world, says that one of the reasons for the significant deceleration is the saturation of devices in developed markets (U.S., Canada, Japan and Western Europe). However, emerging markets like those in Asia (other than Japan), the Middle East, Africa, Latin American and Eastern Europe are expected to grow within the market between 2015 and 2010.

“From a technological standpoint, smartphone innovation seems to be in a lull as consumers are becoming increasingly comfortable with ‘good enough’ smartphones,” said Jitesh Ubrani, senior research analyst with IDC’s Worldwide Quarterly Mobile Device Trackers. “However, with the launch of trade-in or buy-back programs from top vendors and telcos, the industry is aiming to spur early replacements and shorten lifecycles.”

As for the future, two areas are expected to see tremendous growth:  augmented and virtual reality (AR/VR), and phablets. Innovations in AR/VR may intersect with the smartphone market and force users to upgrade their mobile devices. Analysts predict this happening the next year to year and a half.

The cross between a tablet and phone, the phablet, has already gained traction over the past two years. Apple, Samsung, and LG have maintained a strong footing in the phablet category. Analysts say average selling prices for phablets will reach $300 by 2020, which is a drop from about $420 in 2015.

As for forecasts for platforms, the IDC does not anticipate changes for Android and expects it to keep its hold of the more than 85 percent of the smartphone market. Google’s new offerings — Daydream and Project Tango — may allow for enhanced cases and experiences related to hardware. And, due to the new iPhone rumored to do away with the headphone jack and other hardware changes, a decline in iPhone shipments is anticipated in the short term, though iPhone shipments are expected to rebound to a quarter billion units shipped by 2020.