Gartner: Smartphone sales to grow 7% this year, ends double-digit growth era

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KUALA LUMPUR (April 4): The double-digit growth era for the global smartphone market has come to an end, said Gartner Inc research director Ranjit Atwal.

The global information technology research and advisory company estimates global smartphone sales will for the first time exhibit single-digit growth this year, increasing 7% to reach 1.5 billion units in 2016 compared to 2015.

The total mobile phone market is forecast to reach 1.9 billion units in 2016, it said.

"Worldwide combined shipments for devices (personal computers (PCs), tablets, ultramobiles and mobile phones) are expected to reach 2.4 billion units in 2016, a marginal 0.6% increase from 2015. End-user spending in constant US dollars is estimated to decline by 1.6% year-on-year (y-o-y)," Gartner said in a statement today.

Ranjit said 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 this year, exhibiting a 0.7% and 0.4% growth respectively," he added.

And while smartphone sales will continue to grow in emerging markets, the pace of growth will slow down.

Gartner predicts that, through 2019, 150 million users will delay upgrades to smartphones in emerging Asia-Pacific, until the functionality and price combination of a low-cost smartphone becomes more desirable.

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

Gartner pointed to countries such as India that will help generate new mobile phone user growth this year. Sales of smartphones in India are on pace to reach 29% in 2016 and will continue to exhibit double-digit growth in the next two years, said the research firm.

Meanwhile, the global PC shipment market is expected to decline by 1.5% to 284 million units in 2016.

"In 2016, the PC market will reach its last year of decline before returning to growth in 2017," said Ranjit.

"The biggest challenge, and potential benefit for the PC market, is the integration of Windows 10 with Intel's Skylake architecture. It has the potential for new form factors with more attractive features," he added.

In addition, the frustration with the capabilities in tablets will drive some consumers and businesses to review new form factors.

"However, to draw their interest the PC manufacturers need to ensure that they meet demand with the right products at the right price," said Ranjit.

Gartner predicts demand for ultramobiles (basic and utility tablets) will continue to weaken, with a decline of 3.4% this year.