Smartphone growth remains flat, with iPhones down 12% this year

IDC says buyers are waiting for iPhone 7

Growth in smartphones will only reach 1.6% for all of 2016, mainly because of sales declines in developed markets like the U.S., Japan and Western Europe, IDC predicted Thursday.

The analyst firm also said that iPhone shipments for the entire year will decline by 12% globally compared to 2015, while Windows Phone shipments will decline by 75%. Sales of Android smartphones produced by a number of manufacturers will increase by 6.7%, and grab 85% of the global market for all of 2016.

The iPhone decline was partly attributed to Apple customers waiting to purchase the next-generation iPhone, IDC said. That phone, probably in a couple of sizes, is widely expected to be announced along with an upgraded Apple Watch at an event next Wednesday.

The next iPhone, likely to be called iPhone 7, is widely expected to have no headphone jack, but otherwise will have only minor visual differences from current models.

The global growth rate of 1.6% for all smartphones is well behind the 10.4% growth seen in 2015, IDC said. For developed markets like the U.S., the 2016 decline isexpected to be 0.2%, while emerging markets like Asia/Pacific outside of Japan will grow 5.4%.

Smartphone innovation "seems to be in a lull as consumers are becoming inceasingly comfortable with 'good enough' smartphones," IDC analyst Jitesh Ubrani said in a statement. Augmented Reality and Virtual Reality may stimulate phone upgrades and sales in the next year.

The growth in interest in phablets, with screen sizes of 5.5-in. or greater, will continue. Such devices make up about 25% of the market today and will grow to about 33% of the market by 2020, IDC said. By that year, the average unsubsidized selling price for a phablet will have dropped to $304, down by 27% from $419 in 2015.

Smaller smartphones -- those that are 5.4-in. or less -- will have an average selling price of $232 in 2020, down by 12% from $264 in 2015, IDC said.

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