iPhone sales may be set to level off this year, according to Tim Cook, but don’t think that Apple handsets are entering an irreversible decline.
According to the latest forecast from analysts at IDC, in their Worldwide Quarterly Mobile Phone Tracker, iPhone growth should return as soon as 2017 — thanks to Apple’s trade-in programs and expansion into new markets outside the United States.
“I believe Apple’s move into the trade-in business with its ‘Trade Up with Installments’ program is aimed at further increasing churn in some of its most lucrative markets despite the high penetration rates,” said IDC program director Ryan Reith. “By entering this space, Apple can more tightly control the trade-in offerings, as well as monitor the demand for where these perfectly functioning 1-year old iPhones end up. The latter is just as important as the trade-in location as it will give Apple a strong pulse on areas of high demand but perhaps less disposable income.”
IDC also points out that 2015 was, by any measure, a “tremendous” twelve months for Apple, with iPhone shipments growing by a massive 20.2 percent from 2014, to hit a new record of 231.5 million units. For those keeping score, that’s close to double the shipment growth of the overall smartphone market.
And while slowing iPhone shipments in 2016 certainly isn’t good news for Apple, the company is far from alone in suffering these effects. IDC claims while the 2015 calendar year saw 10.4 percent growth for worldwide smartphone shipments next to 2014, 2016 may see this drop to just single-figure 5.7 percent growth.
Overall, the report’s predictions about Apple’s future are reasonably optimistic — certainly compared to rivals. While Android’s market share will continue to grow, IDC thinks it will just speed up a race to the bottom for low-cost handset makers — as evidenced by the fact that just 14 percent of Android shipments in 2015 costing more than $400. Apple, on the other hand, has a lot to look forward to.
Let’s just hope that the iPhone sales “speed bump” doesn’t prove to be quite as long-lasting as slowing iPad sales.