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According to a new report IDC, worldwide smartphone shipments are expected to decline by 3 percent in 2018 before returning to low single-digit growth in 2019 and through 2022.
However, IDC believes that continued developments from emerging markets, mixed with potential around 5G and new product form factors, will bring the smartphone market back to positive growth.
IDC said that smartphone shipments are expected to drop to 1.42 billion units in 2018, down from 1.47 billion in 2017. From a geographic perspective, the China market, which represented 30 percent of total smartphone shipments in 2017, is finally showing signs of recovery. While the world's largest market is still forecast to be down 8.8 percent in 2018 (worse than the 2017 downturn), IDC anticipates a flat 2019, then back to the positive territory through 2022. The US too is forecast to return to positive growth in 2019.
The report pointed out that the slow revival of China was one of the reasons for low growth in Q3 2018 and this slowdown will persist into Q1 2019 as the market is expected to drop by 3 percent in Q4 2018. Furthermore, the recently lifted U.S. ban on ZTE had an impact on shipments in Q3 2018 and created a sizable gap that is yet to be filled heading into 2019.
"With many of the large global companies focusing on high-end product launches, hoping to draw in consumers looking to upgrade based on specifications and premium devices, we can expect head-to-head competition within this segment during the holiday quarter and into 2019 to be exceptionally high," said Sangeetika Srivastava, senior research analyst with IDC's Worldwide.
Meanwhile, the report noted that Android's smartphone share will remain stable at 85 percent throughout the forecast.
Volumes are expected to grow at a five-year compound annual growth rate (CAGR) of 1.7 percent with shipments approaching 1.36 billion in 2022. Android is still the choice of the masses with no shift expected.
IDC expects this upward trajectory to continue through the forecast, but at a softened rate from 2019 and beyond. Not only are market players pushing upgraded specs and materials to offset decreasing replacement rates, but they are also serving the evolving consumer needs for better performance.
Moreover, iOS smartphones are forecast to drop by 2.5 percent in 2018 to 210.4 million. The launch of expensive and bigger screen iOS smartphones in Q3 2018 helped Apple to raise its ASP, simultaneously making it somewhat difficult to increase shipments in the current market slump.