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7bn mobile phones in use by 2020

CCS Insight’s latest mobile phones forecast indicates continued but more stable growth over the next five years. The research company expects 2.04 billion mobile phones to be sold in 2016, with smartphones providing the growth.

Over the next five years CCS Insight expects smartphone sales to grow from 1.5 billion units in 2016 to 2 billion units in 2020. This represents a compound annual growth rate of 7.2 per cent. Furthermore, as smartphones continue to displace non-smartphones, over 2 billion new smartphone owners will emerge over the next five years, taking the number of smartphone users from 3.1 billion in 2015 to 5.4 billion in 2020.

Key markets that will deliver smartphone growth include India and the other emerging markets in the Asia-Pacific region, where CCS Insight expects almost 220 million smartphones to be sold in 2016. A further 85 million smartphones will be sold in Africa.

Jasdeep Badyal, analyst for smart devices at CCS Insight, commented, “Despite a popular misconception that mobile phone growth has ceased, there remains a huge market opportunity. Adoption of new technology is also being boosted as users upgrade to increasingly affordable LTE-capable smartphones.”

The research confirms that LTE device shipments doubled between 2014 and 2015, rising from 443 million units to 900 million units. China accounted for much of the growth, seeing LTE-capable device shipments more than triple from 93 million to 317 million.

Badyal continues, “LTE momentum shows no signs of abating. In 2016 we expect LTE-capable devices to account for 50 per cent of all smartphone shipments; and we expect that to rise to 72 per cent of the market by 2020”.

The forecast also highlights the niche role now played by alternative smartphone operating systems. Software platforms such as BlackBerry OS, Tizen and Windows 10 Mobile will account for just 2 per cent of the market by the end of 2016 as the dominance of Google’s Android and Apple’s iOS rolls on.

Feature phones make up a shrinking proportion of the market. Sale volumes will slide from 550 million units in 2016 to 240 million units by 2020. However, this opportunity remains interesting enough for a number of phone makers to continue to deliver products, albeit with ever-declining profit margins.

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