Gartner forecasts global smartphone sales to grow by only 7% in 2016
PC shipments are expected to recover in 2017 following negative growth in 2016.

Gartner Inc., a global IT advisory firm, projected that the global smartphone market would record single-digit growth for the first time in history in 2016. Gartner predicted that global smartphone sales in 2016 would increase by only 7% from the previous year to 1.5 billion units, while forecasting that total mobile market sales would reach 1.9 billion units.

Gartner also projected that total shipments of all devices, including PCs, tablets, ultramobiles, and mobile phones, would reach 2.4 billion units, an increase of 0.6% year-over-year (see table). On the other hand, it predicted that end-consumer spending would decrease by 1.6% year-over-year in US dollar terms.

Visitors are looking at smartphones at the exhibition hall. (Unrelated to the article content)

"The era of double-digit growth in the global smartphone market is over," said Ranjit Atwal, a principal research analyst at Gartner. "In the past, economic downturns had little impact on smartphone sales and spending, but now the situation has changed." "It was stated that smartphone sales in China and North America this year will record sluggish growth rates of 0.7% and 0.4%, respectively."


▲ Table. Global shipments by device type, 2015–2018 (Units: million) Source: Gartner (March 2016)
 
Smartphone sales in emerging markets are expected to continue increasing, but the pace of growth is projected to slow. Gartner predicted that demand for low-cost smartphones that satisfy both features and price will increase by 2019, forecasting that 150 million users in emerging markets in the Asia-Pacific region will delay upgrading to higher-performance smartphones.

Emerging markets that are growing slowly but steadily
Smartphone sales in India could grow by up to 29% in 2016

Annette Zimmermann, a principal researcher at Gartner, explained, “Smartphone prices have not dropped enough to move from low-cost feature phones to low-cost smartphones,” adding, “Manufacturers are in a situation where they cannot lower smartphone prices below $50.”

Meanwhile, as emerging markets such as India are expected to contribute to the increase in new mobile users, smartphone sales in India are projected to grow by 29% in 2016 and continue double-digit growth over the next two years.

Users' mobile phone replacement cycles will lengthen in developed countries

Gartner analyzed that users' mobile phone replacement cycles will lengthen in mature markets such as North America, Western Europe, Japan, and developed countries in the Asia-Pacific region.

Researcher Zimmermann predicted, “Mobile carriers’ handset sales policies are becoming more complex, and users’ mobile phone replacement cycles are lengthening, particularly as technology evolves gradually rather than radically,” adding that “as more users switch to models with the same specifications as their existing smartphones, the proportion of users moving from basic phones to premium phones will also decrease.”

Global PC shipments decreased by 1.5% year-over-year.>

Global PC shipments in 2016 are projected to reach 284 million units, a 1.5% decrease from the previous year. Additionally, shipments of traditional PCs, including desktops and laptops, are expected to decline by 6.7% this year. Analyst Atwal explained, “The PC market will record negative growth this year, similar to last year, and is expected to enter a recovery phase starting in 2017. The integration of Windows 10 and Intel Skylake will bring both the greatest challenges and potential benefits that the PC market will face. This holds the potential to evolve into new form factors equipped with more attractive features.”

Furthermore, it appears that some companies and consumers dissatisfied with the functional aspects of tablets will seek new form factors. Regarding this, Researcher Atwal added, “The key is for PC manufacturers to attract consumer attention with appropriate products at reasonable prices.”

Demand for ultra-mobile devices is expected to continue weakening this year, declining by 3.4%. Furthermore, not only are users' device replacement cycles lengthening, but some are also expected not to replace their devices within this year.