Mobile phone market peaks at 2bn units a year – Report

The mobile phone market has peaked at 2 billion units per year and will fall 1.3 per cent in 2016 compared to 2015, according to a CCS Insight report. The report which was released last week also said pressure on smaller smartphone makers was on the rise, partly due to component price hikes. The report […]

The mobile phone market has peaked at 2 billion units per year and will fall 1.3 per cent in 2016 compared to 2015, according to a CCS Insight report.
The report which was released last week also said pressure on smaller smartphone makers was on the rise, partly due to component price hikes.
The report said smartphones remained the powerhouse of mobile phone shipment volumes and would account for almost three-quarters of the market in 2016, rising to nearly 90 percent in 2020. In 2016, 1.42 million smartphone units are forecast to ship, up 4.1 percent from 2015.
It said China would recover from a “very weak 2015” but total mobile phone shipments would stabilise at about 450 million units a year until 2020.
When it comes to small phone makers, Marina Koytcheva, director of forecasting at CCS Insight, said: “As growth is depleting, competition is intensifying and it comes as little surprise that margins are being squeezed harder than ever. Companies without the scale advantages of manufacturers such as Samsung, Apple or Huawei will find it much harder to make money”.
This is partly because of component price hikes in the second half of 2016, stemming from shortages of screens, camera modules and memory. Recent earthquakes in Taiwan have disrupted production and bigger phone makers find it easier to snap up available output.
According to Koytcheva, “This is the first time we have seen component price rises for years. Phone makers with low volumes will find it almost impossible to turn a profit in these conditions without raising the prices of their products.”
“It’s a great opportunity for the big players like Huawei and Samsung to exploit their scale, apply pricing pressure and strengthen their leading positions,” she added.