Smartphone sales will slow down in 2016 globally, seeing only 7 per cent growth , says a report by research firm Gartner.
Gartner’s research shows the smartphone market will no longer see double digit growth, with shipments reaching 1.5 billion units in 2016, less than the 14.4 percent growth witnessed in 2015.
“The smartphone market will no longer grow at the levels it has reached over the last seven years. Smartphone sales recorded their highest growth in 2010, reaching 73 per cent,” said Anshul Gupta, research director at Gartner.
According to Gartner’s research, the smartphone market has reached 90 per cent penetration in the mature markets of North America, Western Europe, Japan and mature Asia/Pacific, which will further slowdown growth. Users in these regions are not replacing or upgrading their smartphones as often, which is affecting growth, notes the firm.
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“In the mature markets, premium phone users are extending life cycles to 2.5 years, which is not going to change drastically over the next five years,” added Gupta.
According to Gartner, another reason for this slow growth is that “Communications Service Providers (CSPs) have moved away from subsidies providing a ‘free’ smartphone every two years, which has led to more varied upgrade cycles.”
Gartner says in emerging markets, the average lifetime of premium phones is between 2.2 and 2.5 years, while basic phones have an average lifetime of three years and more.
Even as the future looks bleak for the smartphone market, India remains a growth opportunity, notes the research firm. “India has the highest growth potential…Sales of feature phones totaled 167 million units in 2015, 61 percent of total mobile phone sales in India,” said Gupta.
The research firm expects 139 million phones to be sold in India in 2016, thanks to fall in average selling prices (ASPs) of low-end models. Interestingly the report says, smartphones under $120 (Rs 8,000) will continue to contribute around 50 per cent of overall smartphone sales in 2016.
Gartner points out smartphones sales were flat in China in 2015, and little growth is expected in the next five years.