Apple iPhone 8 will spur a major upgrade cycle come 2018 : IDC

According to the new report by International Data Corporation (IDC), Apple iPhone 8 will spur a major upgrade cycle come 2018 and drive iPhone shipments up by 9.1 percent.

IDC said that Apple is expected to demonstrate nominal 1.5 percent year-over-year growth in 2017 despite the steadily growing hype around the September iPhone launch. This is a considerable improvement from the 7 percent decline in iPhone shipments in 2016. From there, things only get better for Apple as IDC anticipates the arrival of the iPhone 8 will spur a major upgrade cycle come 2018. Despite the new device launching later this year, IDC expects a majority of the shipments are likely to land early in 2018.

The research firm also projects 9.1 percent growth in 2018 with the iPhone 8 and the new 7S/7S+ models playing a pivotal part in the near double-digit growth next year.

However IDC pointed out that Android OS continues to dominate on a global level and shipments on the platform to slightly outperform the market with 2.3 percent year-over-year growth in 2017, while worldwide smartphone shipments are expected to maintain positive growth through 2021.

"The big inflection point that everyone is watching for is when the smartphone market experiences its first year-over-year decline," said Ryan Reith, program vice president with IDC's Worldwide Quarterly Mobile Device Trackers.

Reith said, "We believe the two main catalysts for continued growth are bringing first-time users onto a smartphone and maintaining life cycles that are close to two years. At the end of 2016, we estimated that about half of the world's population was using a smartphone, which leaves plenty of room for additional first-time users. And, despite very high saturation levels in mature markets like North America, Western Europe, Korea, and Japan, we still see the majority of users replacing their handsets roughly every two years. We expect these trends will hold through the forecast."

IDC said, the story around operating system market share hasn't changed much in the past couple of years and this recent forecast doesn't call for much change. To summarize, Apple has generally held 14-15 percent share and Android 85 percent with the bits and pieces spread across a few dying platforms.

"The high-end spectrum of the smartphone market shows no signs of slowing down as we expect the average selling price of a smartphone to increase over 7% in 2017," said Anthony Scarsella, research manager with IDC's Worldwide Quarterly Mobile Phone Tracker.

Scarsella stated that "Premium phablet offerings from a variety of vendors look to be the main driving force behind the growth of devices with screens 5.5 inches and larger, which are set to grow over 34 percent in 2017 across all operating systems. The average selling price of these devices is also expected to increase 9.0 percent as we await the arrival of ultra-premium devices such as the iPhone 8, Note 8, V30, Essential Phone, and the second-generation Pixel. The large screen phenomenon shows no signs of slowing down as phablets will make up 40 percent of the smartphone market by the end of 2017. By 2021, phablets will control slightly over 51% of the market proving that bigger is most often better to most consumers."