Smartphone Sales Set To Stall In 2016

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1.5bn devices will be sold this yet but growth is at lowest level ever as market saturation begins to bite, Gartner reveals

Global smartphone sales are set to continue at their lowest level ever as the mobile industry comes to terms with an over-saturated market, new figures have suggested.

The latest sales figures from analyst firm Gartner estimate that smartphone sales will see only single-digit growth in 2016, the first time this has ever happened.

However global sales are still expected to reach 1.5 billion units throughout 2016, a seven per cent growth from 2015, as the total number of smart devices (including PCs, tablets and ultramobiles) hits 2.4 billion units in 2016, a 0.6 percent increase from 2015.

Struggling

mobile workforce“The double-digit growth era for the global smartphone market has come to an end,” said Ranjit Atwal, research director at Gartner.

“Historically, worsening economic conditions had negligible impact on smartphone sales and spend, but this is no longer the case. China and North America smartphone sales are on pace to be flat in 2016, exhibiting a 0.7 percent and 0.4 percent growth respectively.”

The slowdown will be led by consumers in emerging markets such as the Asia/Pacific region, 150 million of whom will delay upgrading their current device as they wait for a more affordable option, Gartner estimates.

“Prices did not decline enough to drive upgrades from low-end feature phones to low-end smartphones,” said Annette Zimmermann, research director at Gartner. “Vendors were not able to reduce the price of a ‘good enough to use’ smartphone lower than $50.”

These are the kinds of markets Apple will be hoping to target with its ‘affordable’ iPhone SE, as it offers a slightly less premium device to users in developing markets.

But this trend is also occurring in mature markets, as customers become more content to wait for a better deal.

“As carriers’ deals become more complex, users are likely to hold onto phones, especially as the technology updates become incremental rather than exponential,” said Ms Zimmermann. “In addition, the volumes of users upgrading from basic phones to premium phones will slow, with more basic phones being replaced with the same type of phone.”

However, the firm points to countries such as India as possible future sources of growth, as smartphones sales there are set to increase 29 percent in 2016 and will continue to exhibit double-digit growth in the next two years.

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