December 19, 2016
Mobile phone shipments will drop next year for the first time since 2001, according to market research firm IDC Corp.
Sales of mobile phones are expected to drop 1.9% compared to 2016, although smartphone sales will buck the trend with an expected rise of 8.9% in shipments.
In 2001, handset shipments declined 2.3%, although since then the sector has seen double digit yearly growth.
IDC said the predicted downturn in sales is because of the global recession, which has left handset makers, network operators and component suppliers concerned for their future.
In recent years, handset demand from emerging markets such as India, Africa and China has helped sales stay strong.
However, as these markets now mature, growth has begun to slow. Growth in 2016 dropped into single figures at 7.1%, with negative growth anticipated for 2017.
Nokia’s prediction of falling handset sales was the first sign of trouble, said IDC analyst Ryan Reith.
However, when chipset vendors who supply the handset sector announced an expected slowdown, then IDC knew that the problem had permeated the whole market.
IDC anticipates that the sector will start growing again by 2018, although the pace will be slower than that of recent years.