Slower smartphone growth in 2016

Despite the launch of new models, such as the Samsung Galaxy S7 Edge, smartphone growth is expected to slow down this year.
Despite the launch of new models, such as the Samsung Galaxy S7 Edge, smartphone growth is expected to slow down this year.

Global smartphone sale is expected to experience just a single-digit growth this year, according to Gartner.

It estimates that global smartphone sale will reach 1.5 billion units, a seven percent increase from 2015. The total mobile phone market is predicted to reach 1.9 billion units in 2016.

“The double-digit growth era for the global smartphone market has come to an end. Historically, worsening economic conditions had negligible impact on smartphone sales and spend, but this is no longer the case. China and North America smartphone sales are on pace to be flat in 2016, exhibiting a 0.7 per cent and 0.4 per cent growth respectively,” said Ranjit Atwal, Research Director of Gartner.

While smartphone sales will continue to grow in emerging markets, the growth will slow down. Gartner predicts that, through 2019, 150 million users will delay upgrades to smartphones in emerging Asia-Pacific, until the functionality and price combination of a low-cost smartphone becomes more desirable.

“Prices did not decline enough to drive upgrades from low-end feature phones to low-end smartphones. Vendors were not able to reduce the price of a ‘good enough to use’ smartphone lower than US$50,” said Annette Zimmermann, Research Director of Gartner.

Countries such as India will help generate new mobile phone user growth. Sales of smartphones in India are on pace to reach 29 percent in 2016 and will continue to exhibit double-digit growth in the next two years.

In the mature markets of North America, Western Europe, Japan and mature Asia-Pacific, Gartner analysts expect to see an extension of phone lifetimes among users.

“As carriers’ deals become more complex, users are likely to hold on to phones, especially as the technology updates become incremental rather than exponential. In addition, the volumes of users upgrading from basic phones to premium phones will slow, with more basic phones being replaced with the same type of phone,” said Zimmermann.

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