Vendors in developed markets are expected to offer more device financing and trade-in options as shipment volumes continue to slow, according to a new report from the International Data Corporation (IDC).
The move is expected to follow the expected first ever recording of single-digit growth in the global smartphone market this year. For the full year 2015, ICD has forecast shipments will grow just 9.8 percent to 1.43 billion units. The figure represents a downward revision of 0.6 percent to account for slowing growth in Western Europe, Latin America, and Asia/Pacific, excluding Japan, the firm said.
IDC said the sluggishness is expected to linger through the 2015-2019 forecast period thanks to reduced shipments of the Windows Phone and other devices running operating systems other than Android, iOS or Windows.
It is in these conditions that IDC researchers expect vendors to turn to financing and trade-in options to get their devices into the hands of consumers.
“As shipment volumes continue to slow across many markets, consumers will be enticed by both affordable high-value handsets as well as various financing options on pricier models,” said IDC’s Mobile Phones Research Manager Anthony Scarsella. “Vendors will look to push device financing and trade-in options across many of the developed markets as growth in these markets is expected to primarily come from replacement purchases and second devices. These plans could represent the most effective way to get flagship devices into the hands of consumers while speeding up the upgrade cycle through trade-in and incentives.”
According to Scarsella, Apple has already taken the lead with its iPhone Upgrade Program, and other vendors are expected to follow suit in the coming months.
By operating system, Android devices are expected to maintain their dominance over the global market share, growing from 81 percent in 2015 to 82 percent within the 2019 forecast period. Apple’s iOS is expected to maintain a market share of 14 percent to 15 percent annually. The market share for Microsoft’s Windows Phone is expected to remain flat at around two percent in the coming years, with shipment declines forecast for both 2015 and 2016.
Through 2019, IDC expects to see a compound annual growth rate (CAGR) of 7.7 percent for Android devices, 6.5 percent for iOS and 4.5 percent for Windows Phone.