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Smartphone Growth continues to slow down in 2016 – Gartner

Market research firm, Gartner, Inc. said total mobile phone shipments are on pace to decline 1.6% in 2016. The smartphone segment continues to grow, albeit more slowly than in previous years, and is expected to reach 1.5 billion units in 2016.

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“This is no surprise; the smartphone market is maturing, and reaching global saturation with phones that are increasingly capable and remain good enough for longer,” said Roberta Cozza, research director at Gartner.

In 2016, the Android market will continue to be bolstered by Chinese vendors offering more affordable premium devices. Despite the availability of the iPhone 7, Gartner expects a weaker year-over-year volume performance from Apple in 2016, as volumes stabilize after a very strong 2015. As a result, Gartner expects total smartphone market to only increase 4.5% with premium smartphones declining 1.1% in 2016.

“We expect the market for premium smartphones to return to 3.5% growth in 2017, as stronger replacement cycles kick in and in anticipation of a new iPhone next year, which is expected to offer a new design and new features that are attractive enough to convince more replacement buyers,” said Cozza.

Worldwide Devices Shipments by Device Type, 2015-2018 (Millions of Units), Source: Gartner (October 2016):

Device Type 2015 2016 2017 2018
Traditional PCs (Desk-Based and Notebook) 244 216 205 199
Ultramobiles (Premium) 44 49 61 75
PC Market 288 265 266 274
Ultramobiles (Basic and Utility) 196 177 173 173
Computing Devices Market 484 442 439 447
Mobile Phones 1,917 1,887 1,910 1,933
Total Devices Market 2,401 2,329 2,349 2,380
Note: The Ultramobile (Premium) category includes devices such as Microsoft's Windows 10 Intel x86 products and Apple's MacBook Air. The Ultramobile (Basic and Utility Tablets) category includes devices such as, iPad, iPad mini, Samsung Galaxy Tab S2, Amazon Fire HD, Lenovo Yoga Tab 3, Acer Iconia One.

The research firm also said worldwide combined shipments for devices (PCs, tablets, ultramobiles and mobile phones) are expected to decline 3% in 2016. This will mark the second consecutive year of decline. The global devices market fell by 0.75% in 2015.

It said that all segments are expected to decline in 2016, except for premium ultramobiles and utility mobile phones (entry level phones), which are expected to show single-digit growth this year.

The PC market is expected to exhibit an 8 percent decline in 2016, as the installed base bottoms out and replacement cycle extensions halt.

For the PC market to stay on pace for flat growth in 2017, business spending needs to flourish. “The inventory of Windows 8 PCs should have been cleared, and large businesses in mature markets are now looking to move to Windows 10 through 2018,” Gartner said.

About Kugan

Kugan is the founder of MalaysianWireless. He has been observing the mobile industry since 2003. Connect with him on Twitter: @scamboy