Smartphone Shipments to Pass 1 Billion

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Shipments of 4G smartphones will hit a milestone this year as they pass 1 billion. The future may not be as bright.

Research firm IDC says about 2016 smartphone shipments:

Worldwide smartphone shipments are expected to reach 1.45 billion units with a year-over-year growth rate of 0.6% in 2016. … Although growth remains positive, it is down significantly from the 10.4% growth in 2015.

However, 4G smartphones are still expected to show double-digit uptake at 21.3% year-over-year growth globally for 2016, reaching 1.17 billion units, up from 967 million in 2015. Much of this growth is coming from emerging markets (Asia/Pacific excluding Japan, Latin America, Central and Eastern Europe, and Middle East and Africa), where only 61% of 2015 smartphone shipments were 4G-enabled compared to IDC’s 2016 projection of 77%. Mature markets (USA, Canada, Japan, and Western Europe) are further along the 4G adoption curve with 85% in 2015 and a projected 94% in 2016, respectively.

On the same basis, smartphone sales are forecast to be 1.71 billion in 2020.

The market share of Apple Inc. (NASDAQ: AAPL) dropped 11% this year to 14.3%. It is expected to be 14.2% in 2020. Similarly the market share of Alphabet Inc. (NASDAQ: GOOGL) is expected to stagnate as well, from 85.0% in 2016 to 85.6% in 2020. What this means is that the back and forth battle between Android and iOS is over. This also means that sales of the Apple iPhone will be no faster than those of the army of smartphones that use Android. Fortunately¬†for Apple, recent research shows it produces 91% of the industry’s profits.

How will 2016 end? With a bang and not a whimper:

As we approach the holiday quarter smartphone marketing has picked up significantly across almost all regions as expected,” said Ryan Reith, program vice president with IDC’s Worldwide Quarterly Mobile Device Trackers. “In North America and Western Europe, Google has been putting a significant amount of marketing dollars behind the new Pixel and Pixel XL, although early supply chain indications are that volumes are not at the point where Samsung or Apple should see a significant impact for Q4. Of course, as we head into 2017 this can change, but many eyes will be on Google to see how serious they are about pursuing the hardware play.”

Worldwide Smartphone Shipments by OS, Market Share and Annual Growth (shipments in millions)
Platform 2016 Shipment Volume 2016 Market Share 2016 YoY Growth 2020 Shipment Volume 2020 Market Share 2020 YoY Growth 5 Year CAGR
Android 1,228.8 85.0% 5.2% 1,464.7 85.6% 4.2% 4.6%
iOS 206.1 14.3% -11.0% 243.6 14.2% 2.5% 1.0%
Windows Phone 6.1 0.4% -79.1% 1.0 0.1% -19.3% -48.6%
Others 4.5 0.3% -50.0% 1.0 0.1% -7.3% -35.3%
Total 1,445.4 100.0% 0.6% 1,710.3 100.0% 4.8% 3.5%
Source: IDC Worldwide Quarterly Mobile Phone Tracker, November 29, 2016