Friday, December 4, 2015

IDC: Windows Phone down 10 percent as smartphone growth slows

Growth in the global smartphone market is slowing, and will increase by just 9.8% this year -- the first time growth has slowed into the single digits, IDC said Thursday.

Earlier IDC forecasts for 2015 had been higher, but a Windows Phone decline of 10.2% for the year will help drag down expected growth. That decline comes despite the launch of Windows 10 this past summer.

The forecast of 9.8% growth rate is still healthy, but represents a big change from recent years; smartphone shipments grew by 27.5% in 2014.

IDC's updated forecast for 2015 is down from its 10.4% growth prediction in August, and the even higher forecast of 11.3% growth from last May. At the 9.8% rate, 1.43 billion smartphones will ship.

Slower growth in smartphones will intensify slightly for the next five years, IDC added. A big factor in the change is IDC's lower shipment forecast for Windows Phone and alternative operating systems other than Android and Apple's iOS.

Shipment growth in China will actually reach the low single digits, IDC said. By comparison, the highest growth in 2015 will be in the Middle East and Africa, with an increase of nearly 50% compared to last year.

The Windows Phone fall-off means that for 2015, the OS will have just 2.2% market share, compared to 81% for Android and nearly 16% for Apple's iOS.

"Despite all the effort Microsoft has put in the launch of Windows 10, IDC does not expect Microsoft's share of the smartphone OS market to grow much over the coming years," IDC said in a statement.

The 10.2% decline is a big reversal from what IDC forecast in May, when it said Windows Phone would see 34% growth for all of 2015 and would account for the shipment of 46.8 million phones.

With just 31 million phones shipped, Windows Phone will decline even further in 2016, although IDC didn't publish a number for the next year's decline. Over the next five years, Windows Phone is expected to post a 4.5% annual growth rate.

The weakness with Windows Phone is mainly due to lack of partner support by manufacturers, IDC said. "I don't see any vendor stepping up to the Windows Phone plate to say we will be a primary vendor of Windows Phone, although they might have it as secondary choice behind Android," said Ramon Llamas, an analyst at IDC, in an interview.

Llamas predicted that Microsoft will eventually find another vendor partner to sell Windows Phone devices as a secondary line behind Android. Such vendors could include HTC, LG, Samsung or other, smaller Android vendors.

Microsoft's Lumia 950 smartphone, the first to run Windows 10, has received mixed reviews. Computerworld's Preston Gralla noted it is only available from one carrier, AT&T, at $150 with a two-year contract, or $549 unlocked from Microsoft.

Gralla said the 950 comes with an excellent camera and allows for a replaceable battery, but has a cheap plastic case.

Llamas said that IDC's May forecast of 34% Windows Phone growth for 2015 was based on expectations that Microsoft would focus more heavily on Windows Phone improvements with its Windows 10 launch. But the main focus of Windows 10 has instead been on PCs and tablets.

IDC expects Android's share to move from 81% of the total global market this year to 82.6% in 2019. Apple's iOS will have 15.8% market share in 2015, IDC said, but drop to 14.1% by 2019, even though it will see a 6.5% annual growth rate in shipments, reaching 263 million in 2019.

IDC noted that the majority of Apple's sales have transitioned into replacement markets, which is a reason that Apple has moved into the iPhone trade-in space. A replacement market is one where a customer is replacing an existing phone instead of getting a phone or smartphone for the first time.


Source: IDC: Windows Phone down 10 percent as smartphone growth slows

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