Global smartphone sales to slow down: Although India to see a growth in shipments

Global smartphone sales are all set to slow with a Gartner report projecting the sales of smartphones to be at around 7 percent in 2016


Global smartphone sales growth is seeing a dip, thanks to a slow down in sales of smartphones in China. A Gartner report has projected the sales of smartphones to be at around 7 percent in 2016; a far cry from the 14.4 percent growth that 2015 saw.

Gartner is expecting only around 1.5 billion smartphone shipments in 2016. According to Gartner smartphone market saw its highest growth rate back in 2010, when the market grew by a whopping 73 percent.

On a very basic level, the slowdown of the sales is caused by a slow down in demand. The incentive to upgrade your smartphone has decreased greatly, with the average lifetime of a premium phone lasting anywhere between 2.2-2.5 years. One also needs to factor in that when most new smartphones offer updates, they’re only slightly incremental in nature over  the existing hardware.

We will continue to see smartphone sales grow in emerging markets though. According to Gartner’s predictions, by 2019, 150 million users will have delayed upgrading to a smartphone in the Asia/Pacific region unless a combination of functionality and price in a low cost smartphone becomes desirable enough to prompt an upgrade.

Basic mobiles (non-smartphones) have an average lifetime of three years and upwards and it is these phones that accounted for 61 percent of phone sales in India last year, reports TechCrunch. This leaves scope for phone upgrades as newly introduced smartphones are becoming increasingly affordable.

Focussing on the Indian markets alone, TechCrunch reports that it is estimated that 139 million smartphones will be sold in India  this year. The average selling price of mobiles remains below $70 (approx Rs 4,700) and smartphones that are priced below the $120 (approx Rs 8,000) mark are expected to contribute to half of overall smartphone sales this year.

This isn’t exactly the best news for Apple who was targetting India as a market after a global slow down in the sales of their smartphones. Mary Meeker, partner at venture capital firm KPCB said on Thursday that the global smartphone shipment growth slowed to 10 percent in 2015 from 28 percent the year before. At the same time, India grew over 20 percent, reports The Economic Times.

Looking at China in terms of growth of smartphone sales, Gartner is expecting “little growth” in the region over the next five years. This is because China’s market is saturated, yet highly competitive. The types of mobile phones that are in popular demand in China is completely different as compared to India because in China, smartphone sales represented 95 percent of the total mobile sales last year.

Gartner does say it sees opportunity for “non-traditional” vendors in China, projecting that by 2018 at least one such phone maker will be among the top five smartphone brands in the country.

“Chinese internet companies are increasingly investing in mobile device hardware development, platforms and distribution as they aim to grow their user bases and increase user loyalty and engagement,” notes Gartner analyst Annette Zimmerman in a statement.

Comparing the markets in India and China, the Economic Times notes that India still sells only as many phones in a year that China sells in a quarter. Also, India's average selling price of smartphones at $132 (approx Rs 8,800)  is almost half of China's and unlikely to grow soon by much, given that most of the market is still rural and use feature, or basic, phones.

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