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Slowing Smartphone Sales: 7% Growth This Year

Global smartphone sales will continue to slow this year, with the market no longer growing in double digits, according to Gartner.

Gartner expects worldwide smartphone sales to grow 7 per cent this year, reaching 1.5 billion units, down from 14.4 per cent growth in 2015.

Looking ahead, Gartner states that smartphone sales are on pace to total 1.9 billion units in 2020.

“The smartphone market will no longer grow at the levels it has reached over the last seven years,” Gartner research director Roberta Cozza commented. “Smartphone sales recorded their highest growth in 2010, reaching 73 per cent.”

Gartner notes that the smartphone market has reached 90 per cent penetration in the mature markets of North America, Western Europe, Japan and mature Asia Pacific, slowing future growth, with users in these regions not replacing or upgrading their smartphones as often.

“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,” Cozza commented.

Communications service providers have moved away from subsidies providing a “free” smartphone every two years, leading to more varied upgrade cycles, on the other hand introducing financing programs, with vendors such as Apple offering upgrade programs providing users with new hardware after only 12 months.

“These programs are not for everyone, as most users are happy to hold onto their phone for two years or longer than before,” Cozza observed. “They do so especially as the technology updates have become incremental rather than exponential.”

Meanwhile, with the mature markets increasingly saturated, Gartner notes that the focus for many vendors is on India and China, with India the main focus and Gartner forecasting that sales in India will this year grow 29.5 per cent year-on-year.

“The worldwide smartphone market remains complex and competitive for all mobile phone vendors, and we are not expecting the vendor landscape to get smaller,” Annette Zimmermann, Gartner research director, commented.

“In such a fluid vendor landscape, some will exit the market while newcomers, including mobile manufacturers or internet service providers from China and India, could make their debut.”

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