IDC says smartphone market returning to growth

Turning point reached although 2018 will show decline overall, according to IDC figures

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IDC says smartphone market returning to growth IDC says that 2019 will show a return to growth for the worldwide smartphone market.
By  Mark Sutton Published  August 30, 2018

IDC expects the worldwide smartphone market to begin recovery in the second half of this year.

Although the analyst company says that 2018 will be down overall, the smartphone market will be back to single-digit growth in 2018 through to 2022, with larger screen devices leading the return.

Figures from the IDC's Worldwide Quarterly Mobile Phone Tracker predict a 0.7% decline in phone shipments in 2018, down to 1.455 billion units, down from 1.465 billion in 2017. However, IDC believes the market will return to positive growth in the second half of 2018 with volumes up 1.1% compared to the second half of 2017. In the long-term forecast, IDC expects the overall smartphone market to reach 1.646 billion units shipped in 2022.

IDC said that it believes the global smartphone market is healthy and has plenty of upside. Large-screen smartphones (5.5 inch and larger) are expected to lead growth, with shipments of 941.6 million in 2018, accounting for 64.7% of all smartphones, up from 623.2 million units in 2017 and 42.5% share. By 2022, shipments of these larger screen smartphones will jump to 1.391 billion units, or 84.5% of overall shipment volume.

The industry is experiencing a shift toward higher aspect ratios, at or near 18:9, which require a larger screen to support the widescreen viewing angle. While the 18:x aspect ratio started with flagship and higher-end devices in 2017, it began to appear in lower-priced devices in 2018, including some sub-$200 handsets. By Q2 2018, 16:9 smartphones were overtaken by 17.5:9 aspect ratios (or higher) for the first time. As Chinese brands, such as Huawei, OPPO, vivo, and Xiaomi, expand their international presence, it is likely the focus on large screens and aspect ratios will remain a focus across their entire portfolio. The anticipation of the new iPhone models this fall, two of which IDC believes will be above 6 inches and available for shipment in the second half of 2018, will act as another catalyst toward driving these important display trends.

"With two out of three new iPhones expected to be larger than 6 inches, Apple will not be left behind in the 2018 race for increased screen real estate," said Melissa Chau, associate research director with IDC's Worldwide Quarterly Mobile Device Trackers. "You could say the term ‘phablet' is becoming less relevant now that most smartphones will ship with larger screens, and when folding screens start coming into play in the medium term, this screen trend will evolve in new directions."

IDC expects Android to control around 85% of the smartphone market through the forecast period, with volumes showing CAGR of 2.4% of five years. Android devices are also showing a double-digit growth in average selling price, with average price for an Android device to grow by 11.4% to $262 in 2018. The trend will slow, but is expected to continue as manufacturers push buyers to slightly more expensive devices.

iPhone volumes are expected to grow by 2.1% in 2018 to 220.4 million in total. IDC is forecasting iPhones to grow at a five-year CAGR of 2%, reaching volumes of 238.5 million by 2022. With larger screen iOS smartphones coming up for launch in the second half of 2018, IDC has shifted greater volumes into the 6-inch to sub-7-inch screen size forecast for iOS. Products are on schedule to begin shipping in the third quarter and ramping up into the fourth quarter of 2018, with volumes growing to account for half of all iPhones shipped by 2022.

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