Smartphone growth to slow, IDC says

Analyst firm predicts 10% annual growth through 2018.

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Smartphone growth will continue at nearly 10% annually through 2018, but that’s well behind increases in recent years.

IDC said Monday that global smartphone shipments in 2014 will reach nearly 1.3 billion units, an increase of 26% over 2013. But for 2015, IDC predicted, 1.4 billion smartphones will ship to retailers, only a 12% increase over 2014.

In many markets, the slowdown is happening because so many users already have smartphones and keep them longer in some cases.

IDC smartphone chart IDC

IDC expects global smartphone shipments in 2014 to reach nearly 1.3 billion units.

Also, smartphone prices are dropping dramatically, primarily because of several Chinese manufacturers. Premium phones like the iPhone 6 will keep their average selling price, but better specs are turning up in more affordable models, IDC said.

“Consumers no longer have to go with a top-of-the-line handset to guarantee decent hardware quality or experience,” said Melissa Chau, an IDC analyst, in a statement.

For all of 2014, the average selling price of smartphones will be $297 (with no subsidy), and then drop to $241 by 2018.

Android will dominate shipments in 2018, reaching about 80% (a decline from 82% in 2014). Meanwhile, iPhone will drop to 12.8% over the same period, compared to 13.8% in 2014. By 2018, iPhone will have 34% of all smartphone revenues, compared with 61% for Android. 

IDC said Android’s dominance will hurt new operating systems like Tizen and Firefox.  Newer OSes won’t be able to compete on lower prices and will need to offer a “radically different appeal to gain any significant traction,” IDC added. 

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