Smartphone Market Dipped For First Time In 2017, But Hasn’t Peaked Yet
Worldwide smartphone shipments fell for the first time ever in 2017, largely due to slumping sales in China, but the market is expected to recover this year and show modest growth for the next few years, research firm IDC reported Tuesday.
Global smartphone shipments declined 0.5% to 1.46 billion units in 2017, IDC said. Shipments of smartphones running Alphabet's (GOOGL) Google Android operating system rose 0.1% in 2017, while Apple (AAPL) iPhone shipments rose 0.2%. Phones running other operating systems plummeted 66.6% year over year as Microsoft (MSFT) exited the market and other alternatives faded.
Android smartphones accounted for 85.1% of shipments in 2017, followed by iPhone at 14.8%. Others accounted for just 0.1% of the market, IDC said. IDC has been tracking smartphone shipments since 2004.
"2017 turned out to be the year we all knew would eventually come — when smartphone volumes finally experienced a contraction," IDC analyst Ryan Reith said in a news release. "That fact that China alone declined almost 5% in 2017 was a huge factor for why global volumes fell, but EMEA (Europe, Middle East and Africa) also declined 3.5%, and the U.S. market was flat."
IDC expects smartphone shipments to return to low single-digit growth (2.1%) in 2018, with phablets outselling regular smartphones for the first time. Phablets are large-screen smartphones with displays of at least 5.5 inches. Phablets, a contraction for phone-tablets, accounted for 43% of smartphone sales last year and are projected to reach 56% in 2018.
IDC is modeling a compound annual growth rate of 2.8% for worldwide smartphone shipments from 2017 through 2022. It sees smartphone shipments reaching 1.68 billion units in 2022.
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Apple shipped 215.8 million iPhones in 2017 with 64% of those coming from Plus-size iPhones, including the iPhone X, which has a 5.8-inch display.
IDC expects iPhone shipments to grow 3.7% to 223.8 million units in 2018 and reaching 242.4 million in 2022. Overall iPhone volumes are expected to grow at a five-year compound annual rate of 2.4%.
Apple shares were down a fraction to close at 178.39 on the stock market today. Earlier in the session, Apple notched a record high of 180.48. Alphabet was down 2.3% to 1,117.51.
Growth drivers for the smartphone market will include such new technologies as 5G wireless and augmented reality and artificial intelligence capabilities, IDC said.
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