A new report from the the International Data Corporation (IDC) suggests smartphone profits could slow down significantly over the next four years, even as sales continue to grow. The study, which attempts to predict what the market will look like in 2018, offers some insight into how things may shake out.
When it comes to the ongoing operating system wars between Apple and Google, not much will change, at least according to the IDC. Android is expected to dominate 80-percent of the market and 60-percent of mobile profits by 2018, while Apple will hold on with 13-percent of shipments and 34-percent of the profit. The report adds that it’s unlikely any new operating system could really compete without offering a “radically different appeal,” though it does predict that Microsoft’s Windows OS could jump from 2.7 percent to 5.6 percent of the smartphone market by 2018.
Smartphone growth is expected to slow down in general over the next few years. Shipments should hit a total of 1.3 billion units for 2014, for an increase of 26.3-percent over last year, before growing another 12.2-percent to 1.4 million units shipped in 2015. By 2018, smartphone shipments will reportedly hit 1.9 billion units, marking an annual growth rate of just 9.8-percent. At the same time, prices will continue to drop as companies compete to offer the best deal.
We’re already starting to see Chinese companies like Lenovo and Xiaomi disrupt the smartphone market, and that’s likely to increase in the next few years. The average smartphone price should hover at $297 this year, and could drop to $241 by 2018. In India that number is already at $135, and could hit $102 by 2018.
At the same time, prices in developing countries won’t change very much. The IDC notes that there will always be a market for premium devices like the iPhone, which should help Apple keep a foothold even as values continue to drop overall.