Coming off the smartphone market's lowest year-over-year growth of 2.5% in 2016, a new forecast from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker shows worldwide smartphone shipments rebounding in 2017 and beyond.
While growth is expected to remain in the low single digits, IDC predicts shipment volumes to grow 4.2% in 2017 and 4.4% in 2018 with a compound annual growth rate (CAGR) of 3.8% over the 2016-2021 forecast. Shipments are forecast to reach 1.53 billion units in 2017 and grow to 1.77 billion in 2021.
From a platform perspective, IDC doesn't expect much change throughout the forecast with Android accounting for roughly 85% of smartphone shipments and Apple making up the rest.
The outlook for Microsoft-based smartphones remains virtually nonexistent given the lack of OEM partner support.
Although Android growth will gradually decline, IDC does not yet see a point where shipments will contract year over year given the demand for new features such as augmented and virtual reality.
For iOS, 2016 was the first time Apple experienced a year-over-year decline in shipments with iPhone volumes falling 7.0%.
IDC expects a strong rebound in iPhone volumes in 2017 following the launch of its next set of devices with many rumored technical changes as well as a strong push for the 10th anniversary.
"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," said Ryan Reith, program vice president with IDC's Worldwide Quarterly Mobile Device Trackers. "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."
"Despite the moderate 2.5% growth in 2016, phablets displayed 49% year-over-year growth as consumers continue to flock to big-screened devices in both emerging and developed markets," said Anthony Scarsella, research manager with IDC's Worldwide Quarterly Mobile Phone Tracker. "Phablets will undoubtedly be the main force driving the market forward thanks to an abundance of feature-rich devices in both the premium and entry-level segments. Total phablet shipments worldwide 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 comparison, regular smartphones will grow at a rate of just 1.1% during the same period, proving perhaps that bigger may be better, or at least more popular when it comes to smartphones."