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IDC and Strategy Analytics cut global smartphone forecasts

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Smartphone market trackers IDC and Strategy Analytics have both downgraded their 2016 full-year global smartphone shipment forecasts.

When they published their Q1 2016 numbers at the end of April IDC noted flat year-on-year global smartphone growth while SA reckoned it declined by 3%. Before those numbers came out IDC had forecast 5.7% growth for full-year 2016 and SA had estimated 7% growth. Now IDC has downgraded its forecast to 3.1% and SA is going for 4%.

“Consumers everywhere are getting savvy about how and where they buy their smartphones, and this is opening up new doors for OEMs and causing some traditional channels to lose some control of the hardware flow,” said Ryan Reith of IDC. “Smartphones sold into eTailer channels grew 65% in 2015 and are expected to account for roughly 12% of smartphone shipments in 2016, up from just 4% in 2013. Consumers are having more say over which brands they want and at the same time able to bargain shop.”

“We are currently forecasting global smartphone sales at a modest +4% YoY in 2016, +2% YoY in 2017, before returning to growth, with the emergence of 5G, at +5% YoY growth in 2020. The smartphone market will be flat in the near-term, due to penetration maturity and a mixed global economy.

“Q2 2016 looks like it will also be soft, as Apple and others are correcting inventory build-ups. We expect H2 2016 to stabilize, with the arrival of big new flagship models from Apple and Samsung, but not exciting enough to massively offset the H1 2016 slowdown.”

It looks like the weak Q1 numbers may have taken everyone slightly by surprise. As well as the maturity of many smartphone markets, the decoupling of the cost of devices from mobile contracts has probably lengthened refresh cycles and hence slowed sales further. If Q2 ends up being flat or negative again then the research firms may be forced to forecast a full-year decline.

It’s also worth noting in the IDC table below that we’re rapidly heading towards a complete duopoly in smartphone operating systems, with Windows Phone and others forecast to fade away. In fact even the 6.8 million Windows Phone units forecast to be shipped in 2020 seems optimistic given Microsoft’s recent retreat from smartphones.

Worldwide Smartphone Shipments by OS, Market Share, and 5-year CAGR, 2015-2020 (shipments in millions)
Platform 2016 Shipment Volume* 2016 Market Share* 2016 Year-over-Year Growth* 2020 Shipment Volume* 2020 Market Share* 2020 Year-over-Year Growth* 2015-2020 CAGR*
Android 1,240.5 83.7% 6.2% 1,565.3 85.1% 5.3% 6.0%
iOS 226.8 15.3% -2.0% 267.1 14.5% 3.5% 2.9%
Windows Phone 11.2 0.8% -61.6% 6.8 0.4% -9.5% -25.3%
Others 4.0 0.3% -55.7% 0.5 0.0% -9.7% -43.1%
Total 1,482.5 100.0% 3.1% 1,839.7 100.0% 5.0% 5.0%
Source: IDC Worldwide Quarterly Mobile Phone Tracker, June 1, 2016

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