IDC: Global Smartphone Sales to Cool Off Through 2018

When 2014’s worldwide smartphone shipments are done and counted, the year-over-year growth rate totals will show it to be a high-water mark for the four-year period through 2018, according to researcher IDC’s latest figures.

By IDC’s reckoning, worldwide smartphone shipments will reach about 1.3 billion units in 2014, for an increase of 26 percent over last year but in 2015, the researcher estimates only a slight increase to about 1.4 billion units. By 2018, the annual shipment totals will only hit 1.9 billion units, resulting in a 9.8 percent compound annual growth rate (CAGR) for the four-year period.

The expected slowdown in smartphone shipments pales in comparison to how rapidly revenue totals will shrink, however, as IDC projects pricing pressure will pare sales totals to a 4.2 percent CAGR for the same period.

Guess which mobile OS platform is going to make shipment hay in the next four years? If you picked Microsoft’s (MSFT) Windows Phone, you figured right. According to IDC, Windows Phone, with a small 2.7 percent market share in 2014, will more than double its stake to 5.6 percent, increasing its shipment totals from 35 million to 105 million in the process, for a 31.4 percent CAGR by 2018.

Google’s (GOOG) Android will continue to lead the market in shipment and Apple’s (AAPL) iOS will show the way in revenue, IDC said. By 2018, Android will control 80 percent of global smartphone shipments while iOS will command 34 percent of revenues.

“As shipment volume slows, we expect greater attention to shift toward value trends,” said Ramon Llamas, IDC Mobile Phones research manager. “Apple’s approach with premium pricing ensures a growing portion of overall revenues despite its declining market share,” he said. “Meanwhile, Android’s multi-faceted approach—with forked versions and low-cost Android One strategy—will produce mixed results, yet it allows deeper penetration into emerging markets.”

And, about China, IDC said that it had “seen the last of the heydays of heady growth in the smartphone market.” Boiled down, what’s that mean, exactly? India’s where all the smartphone action is now in Asia Pacific, shipping 23 million units in Q3 as China’s growth slowed to 1 percent quarter-over-quarter, while other emerging markets forged ahead with 22 percent growth.