IDC_logoThe latest global mobile phone market forecast from International Data Corporation (IDC,) the Worldwide Quarterly Mobile Phone Tracker, headlined “Worldwide Smartphone Growth Forecast to Slow from a Boil to a Simmer as Prices Drop and Markets Mature,” points to worldwide smartphone shipments reaching “a total of nearly 1.3 billion units in 2014, representing an increase of 26.3% over 2013.” That impressive growth rate, however, is due to halve during 2015, with IDC predicting “1.4 billion smartphones to be shipped worldwide in 2015 for a 12.2% year-over-year growth rate. Slower annual growth continues throughout the forecast with unit shipments approaching 1.9 billion units in 2018, resulting in a 9.8% compound annual growth rate (CAGR) for the 2014–2018 forecast period.” Manufacturers will be facing a worse picture on revenues, meanwhile,  “hard hit by the increasingly cutthroat nature of pricing, resulting in a 4.2% CAGR over the same forecast period.”

IDC attributes this revenue erosion to “the impact of upstart Chinese players,” with Melissa Chau, Senior Research Manager with IDC’s Worldwide Quarterly Mobile Phone Tracker, stating: “While premium phones aren’t going anywhere, we are seeing increasingly better specs in more affordable smartphones. Consumers no longer have to go with a top-of-the-line handset to guarantee decent hardware quality or experience.”

Android, meanwhile, will continue to dominate the global market in terms of volume, with Apple leading on revenues through its command of the premium segment. “By 2018, Android will control 80% of global smartphones shipped and 61% of revenues, while iOS will control only 13% of volumes and 34% of revenues,” notes IDC. “With Android volumes so dominant, it is no longer a possibility for new operating systems like Tizen and Firefox to compete on price alone – any underdog OS must bring a radically different appeal to gain any significant traction.” On the subject of underdog OS’s, IDC sees Windows Phone market penetration rising to 5.6 percent by 2018, even with a 31.4 percent CAGR, with Android still at 80 percent in 2018.

For readers using their phones as ereading devices, this creates an attractive picture of increasingly capable, and larger, cheap phones, but publishers and others hoping for dramatic new market growth are obviously due to be disappointed. Smartphone manufacturers wanting to increase their volumes and reboot their growth rates are going to have to look even harder at how to bring the 4.3 billion people still not using the internet online – which is almost certainly going to happen through smartphones.

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