Gartner Forecasts Global Device Shipments to Decline for Second Consecutive Year
Mobile shipments are expected to decline 1.6% in 2016, but will rebound in 2017.

Gartner Inc. forecasts that total shipments of all devices (PCs, tablets, ultramobiles, and mobile phones) worldwide will decline by 3% in 2016 compared to the previous year.

This marks the second consecutive year of decline for the global device market, following a 0.75% decline in 2015. "It will be difficult for the global device market to return to single-digit growth anytime soon," said Ranjit Atwal, research director at Gartner. "We expect growth to remain at the current level for the next five years. In 2016, we expect declines across all device segments, with the exception of premium ultramobiles and utility phones (basic mobile phones). Both segments are expected to see single-digit growth this year."

“Premium ultramobiles will start to deliver the benefits of comprehensive performance, the latest Intel CPU platforms, and Windows 10,” said Ranjit Atwal, a researcher at NXP.


▲Global shipments by device type, 2015-2018 (unit: millions of units) Source: Gartner (October 2016)

The PC market declined 8% in 2016.

The PC market is expected to decline by 8% in 2016. This is because not only the installed base but also the extension of product replacement cycles will remain stagnant. Researcher Ranjit Atwal stated, "The impact of currency depreciation on the market is diminishing," adding, "The second quarter of this year saw the lowest impact of exchange rates since the same period last year." In Western Europe and other regions, where the euro depreciated significantly in 2015 and PC prices rose, growth rates nearly stagnated (-0.9%) in the second quarter of this year. This represents four consecutive quarters of decline.

If this situation persists, the PC market will bottom out this year. The Western European PC market is still going through a difficult period following the Brexit vote. Researcher Ranjit Atwal said, "Device manufacturers are mitigating the impact of the depreciating pound in two ways: first, by taking advantage of the possibility of a single-digit decline in PC component prices in 2016, and second, by maintaining prices through 'de-features' in PCs. Taking all these factors into account, Gartner expects UK PC prices to increase by less than 10% in 2017."

▲LG Electronics is aiming for a comeback by recently releasing the strategic smartphone 'LG V20' that implements the world's best smartphone sound.

For the PC market to maintain its current size in 2017, corporate spending must remain at its current level. “Windows 8 PC inventory will be depleted first, and replacement demand for Windows 10 PCs will occur through 2018, mainly among large enterprises in mature markets,” said Ranjit Atwal, a researcher at Atwal. “Furthermore, hardware affordability is decreasing, and virtual reality content such as games, stories, and other entertainment is increasing, which will drive demand for PC upgrades as individual PC buyers seek out immersive content.”

Smartphone growth will continue to slow in 2016.

Overall mobile phone shipments are projected to decline by 1.6% in 2016. Smartphone shipments, while slower than in the past, are expected to maintain steady growth, reaching 1.5 billion units this year. "This is not surprising, given that the smartphone market is maturing and reaching global saturation as devices become more robust and their lifespans extend," said Roberta Cozza, research director at Gartner.

Furthermore, the Android OS market is expected to continue growing in 2016, driven by Chinese companies offering premium devices at more affordable prices. Conversely, Gartner predicted that Apple's performance this year will decline year-over-year, despite the launch of the iPhone 7. This is because Apple's performance is gradually stabilizing following its explosive growth in 2015. Gartner predicted that the overall smartphone market would grow by a mere 4.5% in 2016, with premium smartphones declining by 1.1%.

Researcher Roberta Cozza said, “The premium smartphone market will recover to 3.5% growth in 2017,” adding, “A stronger replacement cycle, along with the new iPhones scheduled to be released next year with new designs and features, will be enough to induce more replacement consumers to purchase.”