Smartphone Market Hits Maturity

source: Nokia

It might seem silly today, but there was a time when virtually nobody actually thought about fixed network voice services as a product like any other--with a product life cycle.

Messaging, linear entertainment video and eventually, even mobility and Internet access will face their own maturation.

The business implications are simple enough: communications service providers must continually innovate, seeking to create or discover big new revenue sources to replace declining revenue sources.

And no revenue source, no matter how big or important, will be immune from the product life cycle.

According to International Data Corporation (IDC) 2015 is likely to be the last year of double-digit smartphone growth.

The 2015 calendar year finished with 1.44 billion smartphone shipments worldwide, which were up 10.4 percent  over 2014.

IDC's most recent projections show 2016 shipments of 1.5 billion, or 5.7 percent growth over 2015.

The trend of single-digit year-over-year growth is expected throughout the forecast with volumes growing to 1.92 billion in 2020. The market will continue to see volumes shifting to the low end with the aggregate market average selling price (ASP) dropping from $295 in 2015 to $237 in 2020.

From a regional standpoint, mature markets like the United States, China, and Western Europe all hit single digit growth in 2015.

That is not the case in high growth markets such as India, Indonesia, the Middle East and Africa, and other pockets in Southeast Asia.

Worldwide Smartphone Forecast by OS – Shipments, Market Share, Year-Over-Year Growth, and 5-Year CAGR (shipments in millions)
Region	2016* Shipment Volumes	2016* Market Share	2016* YoY Growth	2020* Shipment Volumes	2020* Market Share	2020* YoY Growth	5 year CAGR
Android	1,254.6	82.6%	7.6%	1,624.4	84.6%	4.6%	6.9%
iOS	231.2	15.2%	-0.1%	269.0	14.0%	3.2%	3.0%
Windows Phone	23.8	1.6%	-18.5%	17.8	0.9%	-5.7%	-9.4%
Others	9.5	0.6%	-15.1%	9.2	0.5%	4.8%	-3.9%
TOTAL	1,519.0	100.0%	5.7%	1,920.4	100.0%	4.3%	6.0%
Source: IDC Worldwide Quarterly Mobile Phone Tracker, March 3, 2016