Technology | Media | Telecommunications

Thursday, December 01, 2016

Outlook for New Smartphone Tech Innovation in 2017

Worldwide smartphone shipments will reach 1.45 billion units, with a year-over-year growth rate of just 0.6 percent in 2016, according to the latest market study by International Data Corporation (IDC). Although growth remains positive, it is down significantly from the 10.4 percent growth rate in 2015.

However, 4G smartphones will reach 21.3 percent year-over-year growth globally for 2016, at 1.17 billion units -- that's up from 967 million in 2015. Once again, emerging markets are driving most growth, where only 61 percent of 2015 smartphone shipments were 4G-enabled, compared to the 77 percent in 2016.

That being said, mature markets  -- such as USA, Canada, Japan, and Western Europe -- are further along the 4G adoption curve with 85 percent in 2015 and a projected 94 percent in 2016, respectively.

Smartphone Market Development Trends

"It's been a long slog for 4G uptake in many emerging markets as 4G data tariffs have been very expensive compared to 3G, while 4G handsets themselves have also been relatively pricey across the board," said Melissa Chau, associate research director at IDC.

As we look at the current holiday season, smartphone vendor marketing has picked up significantly across almost all regions, as expected. Meanwhile, mobile network service providers continue to promote faster internet access and other more advanced capabilities.

In North America and Western Europe, Google has put a significant amount of promotion behind the new Pixel and Pixel XL, although early supply chain indications are that volumes are not at the point where Samsung or Apple should see a significant impact for Q4.

Of course, as we head into 2017 this can change, but many eyes will be on Google. Will they introduce new integrated 'Google Now' features that give them a competitive edge? We'll have to wait and see.

Why is Google's role so important to the future of smartphone market development? It's because they influence the leading platform, and independent software app developers care about forward-looking market share. Today, the upside is all about Android.

Why Smartphone Prices will Continue to Decline

According to the IDC assessment, Google Android has been and will remain the majority share operating system platform in smartphones for the foreseeable future. It will also be at the core of the aforementioned 4G growth expected in emerging markets -- as low-cost Android vendors are not using newer, faster low-cost chips. Moreover, there's been no indication that the Apple iOS will regain lost market share.

The biggest focus point in regard to Android is Google's recent entry into the hardware space. IDC believes that it's too early to tell if this will negatively impact relations with other hardware partner OEMs, but it is a move similar to Microsoft's entry into the hardware space with Surface. Initially, it doesn't seem to be disruptive. However, the Google move is also aided by the lack of viable mobile platform alternatives.