Smartphone growth set to shrink to record low

Enterprise Innovation editors
Enterprise Innovation

Global smartphone sales growth will shrink to single digits for the first time in 2016, growing 7% from 2015 to 1.5 billion units, according to Gartner.

Worldwide combined shipments for devices (PCs, tablets, ultramobiles and mobile phones) are expected to reach 2.4 billion units in 2016, a 0.6% increase from 2015. End-user spending in constant US dollars is estimated to decline by 1.6% year over year.

"Historically, worsening economic conditions had negligible impact on smartphone sales and spend, but this is no longer the case," said Ranjit Atwal, research director at Gartner. "China and North America smartphone sales are on pace to be flat in 2016, exhibiting a 0.7% and 0.4% growth respectively."

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.

Countries such as India will help generate new mobile phone user growth. Sales of smartphones in India are on pace to reach 29% 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 onto phones, especially as the technology updates become incremental rather than exponential.

Also, the global PC shipment market is expected to total 284 million units in 2016, a decline of 1.5% year-over-year. Traditional PCs are on pace to decline 6.7% in 2016.

"The biggest challenge, and potential benefit for the PC market, is the integration of Windows 10 with Intel's Skylake architecture," said Atwal. "It has the potential for new form factors with more attractive features."

Demand for ultramobiles (basic and utility tablets) will continue to weaken, with a decline of 3.4% in 2016. Not only are users extending lifetimes, but some will also fail to replace these devices at all through 2016.

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