The International Data Corporation has predicted that worldwide smartphone shipments are expected to reach 1.46 billion units with a year-over-year growth rate of 1.6% in 2016.
IDC’s Worldwide Quarterly Mobile Phone Tracker found that while growth remains positive, it is down significantly from the 10.4% growth in 2015.
Jitesh Ubrani, senior research analyst with IDC’s Worldwide Quarterly Mobile Device Trackers, says growth in the smartphone market is quickly becoming reliant on replacing existing handsets rather than finding new users.
“From a technological standpoint, smartphone innovation seems to be in a lull as consumers are becoming increasingly comfortable with 'good enough' smartphones,” he says.
“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. Upcoming innovations in augmented and virtual reality (AR/VR) should also help stimulate upgrades in the next 12 to 18 months."
Larger screens also seem to be a building trend, with a growing interest in AR/VR driving that forward. ‘Phablets’ (5.5 inches or larger) are predicted to go from only one quarter of the market to one third by 2020.
Anthony Scarsella, research manager of Mobile Phones, says that as phablets gain popularity, vendors will further expand their portfolio of large-screened devices – at affordable prices.
"Over the past two years, high-priced flagship phablets from the likes of Apple, Samsung, and LG have set the bar for power, performance, and design within the phablet category,” says Scarsella.
“Looking ahead, we anticipate many new 'flagship type' phablets to hit the market from both aspiring and traditional vendors that deliver similar features at considerably lower prices in both developed and emerging markets,” he explains.
Scarsella also adds that the sverage selling prices (ASPs) for phablets are expected to reach $304 by 2020, down 27% from $419 in 2015, while regular smartphones (5.4 inches and smaller) are expected to drop only 12% ($264 from $232) during the same time frame.