Smartphone market growth to shrink to 3% this year

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Smartphone shipments are expected to grow 3.1 percent in 2016 against 10.5 percent in 2015 and 27.8 percent in 2014, said IDC.

Slowdown in China will be impacting the global smartphone market.

Shipments of smartphone are expected to touch 1.48 billion in 2016 and 1.84 billion in 2020.

The revised IDC forecast will be posing challenges to Samsung, Apple, Lenovo, Huawei, among others.

Large markets like the United States, Western Europe, and China will grow in low single digit rates in 2016, while Japan’s smartphone market will dip by 6.4 percent and Canada’s smartphone market will drop by 6.9 percent.

In telecom operator-driven markets the transition away from two year subsidized contracts toward monthly installment plans are slowly taking place. Many retail heavy markets are seeing a surge in online marketplaces.

Smartphones sold into online market places grew 65 percent in 2015 and are expected to account for roughly 12 percent of smartphone shipments in 2016 against 4 percent in 2013.

Early trade-in programs, much like the one Apple is facilitating, as well as the broader range of cheap unlocked devices, will play a significant role in keeping mature market life cycles close to two years, said IDC.

Devices with 5.5-inch screens and larger are expected to have double-digit growth until 2019, then slowing to 9.2 percent growth in 2020.

Anthony Scarsella, research manager with IDC’s Mobile Phones team, said: “We are witnessing a plethora of vendors shifting their flagship devices towards the Phablet category as the average selling price for a Phablet will remain significantly higher than a regular smartphone ($383 vs. $260 in 2016) through the forecast period.”