Go to Admin » Appearance » Widgets » and move Gabfire Widget: Social into that MastheadOverlay zone
CCS Insight’s latest global forecast for mobile phones confirms that the market has peaked at about 2 billion units per year after decades of growth.
The research firm expects that in 2016 shipments of mobile phones will slip 1.3 percent from their level in 2015, with most markets experiencing a difficult year. A notable exception is China, where the market is recovering from a very weak 2015; however, echoing the global trend, total shipments in the country are expected to stabilise at about 450 million units a year until 2020.
Marina Koytcheva, Director of Forecasting at CCS Insight, noted, “After years of analysts and commentators talking about mobile phone market peaking within the visible horizon, it has now reached that point”.
CCS Insight’s forecast shows that smartphones remain the powerhouse of mobile phone shipment volumes. They continue to grow as a proportion of the total market and will account for almost three-quarters of the market in 2016, rising to nearly 90 percent in 2020. In 2016, 1.42 million units are forecast to ship, up 4.1 percent from 2015.
However, CCS Insight believes the pressure on smaller phone makers is increasing. Koytcheva continues, “As growth is depleting, competition is intensifying and it comes as little surprise that margins are being squeezed harder than ever. Companies without the scale advantages of manufacturers such as Samsung, Apple or Huawei will find it much harder to make money.”
CCS Insight expects the situation to be exacerbated by reports of component price hikes in the second half of 2016, stemming from shortages of screens, camera modules and memory. Shortages are the result of a combination of the biggest names snapping up all available output and recent earthquakes in Taiwan that have disrupted production.
Koytcheva cautions, “This is the first time we have seen component price rises for years. Phone makers with low volumes will find it almost impossible to turn a profit in these conditions without raising the prices of their products. It’s a great opportunity for the big players like Huawei and Samsung to exploit their scale, apply pricing pressure and strengthen their leading positions.”
Another notable finding from the new forecast is the impressive speed of adoption of LTE. Devices with this technology will account for 1.11 billion units in 2016, rising to 1.65 billion units in 2020, or 83 per cent of total mobile phone shipments.
This latest forecast update also includes 5G-capable mobile phones for the first time as commercial 5G networks are expected to launch in volume in 2020. Although 5G networks are likely to launch before this timeframe, we expect many to be designed for fixed-wireless use cases and launch ahead of standards from 3GPP. Subsequently, we expect devices compliant with 3GPP Release 15 to only reach measurable volume from 2020. They will represent the growth story for the next decade.