Commentary

The Slowing Smartphone Market

Worldwide, the smartphone boom appears to be over. 

Yep, to the chagrin of phone makers everywhere, this will be the first full year of single-digit smartphone growth, according to a new forecast from the International Data Corporation.

The IDC and its Worldwide Quarterly Mobile Phone Tracker predict that worldwide smartphone shipments will grow 9.8%, this year, to a total of 1.43 billion units.

What gives?

Mostly, the IDC blames slowing growth in Asian/Pacific markets (excluding Japan), along with Latin America and Western Europe.

Worse yet, the slower growth is expected to intensify slightly through 2019 due to lower shipment forecasts for Windows Phone as well as "alternative platforms":  those running operating systems other than Android, iOS, and Windows Phone.

If not in the double digits, how can phone makers maintain healthy growth rates?

Not by investment in fancy phones, according to Ryan Reith, program director with IDC's Worldwide Quarterly Mobile Phone Tracker.

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Rather, “The main driver… will continue to be the success of low-cost smartphones in emerging markets,” Reith explains in the new report.

That will depend on capturing value-oriented first-time smartphone buyers as well as replacement buyers, Reith notes.

“We believe that, in a number of high-growth markets, replacement cycles will be less than the typical two-year rate, mainly because the components that comprise a sub-$100 smartphone simply do not have the ability to survive two years.”

If I were more cynical, I’d say that sounds like a suggestion for manufacturers to build crappy phones so they can replace them more frequently.

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