Smartphone Growth Stalls Globally As iPhone Sales Decline

The market is saturated. Smartphone providers will now have to extract profits from services built around the phone - or come up with the next magical product. JL

Patrick Seitz reports in Investors Business Daily:

Worldwide smartphone shipments are projected to rise just 0.6% this year compare(d) with 10.4% in 2015. All signs point to 2016 being the first full year of declining shipments for Apple's iPhone. Apple's shipments declined in the first three quarters of this year and are expected to decline again in Q4. (But) Apple took 106% of smartphone industry profits in the third quarter. Its share is more than 100% because other vendors lost money in the business,
Worldwide smartphone shipments are projected to rise just 0.6% this year to nearly 1.45 billion units. That compares with 10.4% growth in 2015, research firm IDC said.
Smartphones using the Android operating system from Alphabet (GOOGL)-owned Google are projected to make up 85% of shipments this year. Android handset shipments are expected to rise 5.2% in 2016 to 1.23 billion units, IDC said. Samsung is the leading Android smartphone vendor.
Meanwhile, Apple (AAPL) iPhone shipments are projected to decline 11% to 206.1 million units this year. Apple is expected to have 14.3% market share in smartphones in 2016, IDC said.
All signs point to 2016 being the first full year of declining shipments for Apple's iPhone, IDC said. Apple's smartphone shipments declined in the first three quarters of this year and are expected to decline again in Q4, IDC said.

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But Apple leads by a mile in terms of smartphone industry profits.
Canaccord Genuity estimates Apple took 106% of smartphone industry profits in the third quarter. Its share is more than 100% because other vendors lost money in the business, resulting in Apple having more smartphone profit than the industry netted overall.
BMO Capital Markets estimates Apple grabbed 104% of smartphone industry profits in Q3. And Strategy Analytics estimates that Apple captured 91% of smartphone industry profits worldwide in the quarter.
Smartphone marketing has picked up significantly in the holiday sales quarter.
"In North America and Western Europe, Google has been putting a significant amount of marketing dollars 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," IDC analyst Ryan Reith said in a statement. "Of course, as we head into 2017 this can change, but many eyes will be on Google to see how serious they are about pursuing the hardware play."
Apple iPhone procurement data for the current quarter and next quarter look negative, UBS analyst Steven Milunovich said in a report on Tuesday.
"Procurement estimates for fiscal Q1 and Q2 are down year over year, putting current consensus estimates for unit shipments growth in December and March at risk," Milunovich said. "We still believe the guide for December implies at least moderate unit growth. It's too soon to make a call on March since Apple might be conservative with its supply chain to avoid repeating last year's mistake of overestimating demand."
Many investors already are looking to fiscal 2018, which starts Oct. 1 next year, he said. That's when the company is scheduled to release its 10th-anniversary iPhone, the rumored iPhone 8. That redesigned handset "could drive significant upgrades," Milunovich said.