Gartner predicts global smartphone sales will continue to slow in 2016-- growth will no longer come at total double digits, instead clocking at 7% to reach 1.5 billion units, down from 14.4% seen in 2015.
"The smartphone market will no longer grow at the levels it has reached over the last 7 years," the analyst admits. "Smartphone sales recorded their highest growth in 2010, reaching 73%."
What lead to such sales slowdown? A smartphone penetration rate reaching 90% in the mature W. European, N. American and Japanese markets, mainly. Furthermore, customers are not replacing or upgrading smartphones as often as in previous years, extending the premium handset lifecycle to 2.5 years-- a replacement rate set to remain as such over the next 5 years.
In the meantime communication service providers (CSPs) are moving away from providing "free" smartphone every 2 years, leading to more varied upgrade programs. For example, Apple offers customers with the latest iPhone after all of 12 months. However, Gartner says most customers prefer to hold on to handsets for 2 years or longer, since "technology updates have become incremental rather than exponential."