Smartphone growth is slowing to a possible tipping point

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Smartphone sales may have reached a tipping point.

The IDC has released new estimates that smartphone shipments will grow just 3% year-over-year (YoY) in 2016 to hit almost 1.5 billion devices. This is a marked decrease from the 10.5% YoY growth in 2015, and likely stems from saturation in developed markets and the fact that emerging markets have yet to show rapid growth.

With the exception of Android phones, IDC expects shipments of smartphones that run all other operating systems to decline YoY.

Google will continue to hold the lion's share of the mobile market, as Android device shipments will increase 6% YoY in 2016 to hit more than 1.2 billion devices globally. Furthermore, IDC expects Android's market share to increase to to 84% in 2016 from 81% in 2015 because manufacturers of inexpensive handsets in developing markets will continue to utilize the Android OS.

Apple, meanwhile, had a difficult start to 2016 and is currently on pace for its first overall YoY decline in smartphone shipments. IDC expects Apple's global market share in 2016 to decline 2% YoY to make up 15% of the total smartphone market. iPhone shipments should hit 227 million units in 2016, down from 232 million units in 2015.

And Microsoft has essentially abandoned its consumer handset business in order to focus on enterprise products, so it's unlikely the company's market share will grow at all in the next five years. IDC expects Windows Phone device shipments to decline 62% YoY in 2016 to just 11 million devices.

This slowing smartphone growth could also affect apps, as consumers tend to download the most apps when they first activate their new devices. Apple, for example has been growing its services revenue in the past few years, and part of that comes from App Store downloads. So the expected decline in iOS devices in 2016 could hamper Apple's ability to continue its growth in this area.

Despite a record-setting holiday quarter, 2015 was likely the last year of double-digit growth for smartphone shipments.

Mature markets were at the heart of this year's deceleration. Adoption has reached new highs in key markets in the United States, Europe, and China. The pool of first-time buyers in these countries is shrinking rapidly, and sales are now primarily coming from phone upgrades.

Meanwhile, emerging markets will continue to see robust shipment growth. India and Indonesia, in particular, will help fuel a large share of the shipments growth within the global smartphone market over the next few years.

Will McKitterick, senior research analyst at BI Intelligence, Business Insider's premium research service, has compiled a detailed report on smartphones by country that forecasts the market through 2021 to reflect slower, stabilizing growth in the long term.

Here are some key points from the report:

The global smartphone market is still growing at a steady pace due to more widespread adoption in emerging markets. We estimate the global market will hit about 2.1 billion units shipped in 2021.

Shipments growth over the past few years has been driven by the falling price of smartphones, which has made handsets more accessible in emerging markets. The average selling price of a smartphone in India nearly halved between 2010 and 2015.

With relatively low smartphone penetration, we forecast Indian smartphone shipments to grow rapidly over the next five years. Nevertheless, India has a long way to go before it surpasses China as the world's leading market for smart handsets. India is estimated to account for roughly 10% of the global smartphone market in 2016, considerably less than China's 30% share.

The global platform wars are over, even as smartphone adoption continues to rise across various markets worldwide. Android and iOS are estimated to account for 97.3% of global platform market share in 2015, compared to 96.3% last year.

Apple closed the year with another strong quarter on the back of its iPhone 6s and iPhone 6s Plus launches. Still, the vendor saw a slight decline in YoY growth of its share of the market in the face of stiff competition from Samsung and Chinese vendors such as Huawei.

In full, the report:

Forecasts global smartphone shipments through 2021.

Explores why India is the next high-growth smartphone market.

Breaks down the global smartphone platform wars.

Discusses smartphone vendor performance market share.

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