The smartphone market has seen stagnation over the past couple of years with lower growth compared to previous years. However, 2017 may be the year when it recovers from its slump if IDC is to be believed.
According to the firm, the market is expected to grow 4.2% in 2017 as opposed to a measly 2.5% in 2016, the lowest ever. The market intelligence company also forecasted a five-year growth period ending 2021 with a compound annual growth rate (CAGR) of 3.8% over the 2016-2021 forecast. Shipments are projected to reach 1.53 billion units in 2017 and grow to 1.77 billion in 2021.
Ryan Reith, program vice president with IDC's Worldwide Quarterly Mobile Device Trackers pointed to a trend shift in low-cost markets as the reason, saying:
"We continue to get questions about longer smartphone life cycles given the number of markets with high penetration levels, but so far we are not seeing any trend in this direction.
When you break down the market you have many different trends occurring. In some low-cost markets like China, we are beginning to see users gradually buying up to a more premium device. This is likely caused by poor satisfaction from previously owned devices and demand for better feature sets. And in mature markets, the premium space is as competitive as ever. This is illustrated by the number of high-end smartphone announcements at MWC this week."
A research manager with the company, Anthony Scarsella, indicated a growth in the phablet market which he said are "expected to reach just under 680 million units by 2021, resulting in a compound annual growth rate of 9.2% for 2016–2021".
In the platform domain, Android will continue to rule as OEMs continue to penetrate growing markets with competitive prices. Phones with 5" displays and higher will grow to account about 91% of Android devices in 2021 as "OEMs figure out ways to produce large screen smartphones at a very low cost". IDC expects 2017 to be a "turnaround" year for iPhones with 4.9% growth over 2016 as the devices continue to grow in China with 30% of its shipments in the region last year, expected to grow to 36% in 2021. Windows Phones will continue its decline into the abyss as OEMs lose interest in the platform with over 69.5% decline in 2017 to just 1.8 million units. The firm "doesn’t see a clear path to turning around the platform."
With several great high-end devices like the LG G6, the highly-awaited return of Nokia and the imminent Galaxy S8 launching this year the forecast might not be too far-fetched as IDC has been in the past.