Gartner: RIP double-digit smartphone growth. 2016 has killed you

Microsoft can stop worrying about smartphone non-strategy

Remember the rapacious smartphone growth that turned once-troubled Apple into the world’s most valuable company? That’s over.

Smartphone sales will grow seven per cent in 2016, to 1.5 billion units.

It’s the first time sales of this once must-have piece of personal tech has grown by a mere single digit percentage, according to Gartner.

The analyst blamed falling consumer confidence, saying worsening economic conditions – factors that had had negligible impact on smartphone sales were finally taking a toll.

Shoppers will hold on to their phones for longer, Gartner said.

By 2020, consumers in “mature” markets will be holding onto their phones for 2.8 years – up from 2.5 now, leading to a drop in sales of 100 million phones.

Ranjit Atwal, Gartner research director, said in a statement: “The double digit growth era for the global smartphone market has come to an end.”

Sales in China and North America, the two totems at opposite ends of the smartphone price spectrum, will be flat – growing 0.7 and 0.4 per cent respectively.

North America had been home to the least price sensitive of smartphone shoppers, hence a huge opportunity for Apple selling expensive devices.

Latterly, China has come online – a market defined not by price but scale of opportunity, hence the flood of lower-priced phones from most vendors, even Apple.

Ironically, raining on the seven per cent growth parade is like fretting about a slowdown in China’s economic growth from 6.9 per cent in 2015 to 6.3 per cent for 2016 when the global economy is forecast to grow at just 3.4 per cent.

Seven per cent in smartphones remains an enviable number, at least for those stranded in PCs.

2016 will see the year-on-year nosedive in PCs finally bottoming out. Gartner expects a decline in sales of a mere 1.5 per cent, to 284 million units.

“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,” Atwal said.

Overall, shipments for all devices – PCs, tablets, ultramobiles and mobile phones – will be flat, growing just 0.6 per cent to 2.4 billion units. ®

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