Apple Mobile OS Growth Battered

By Douglas A. McIntyre Updated Jan 13, 7:18AM EST · Published Jun 2, 9:45AM EDT

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Apple Mobile OS Growth Battered — © Thinkstock

Apple Inc. (NASDAQ: AAPL) can expect more than iPhone sales to be troubled in the months ahead. A forecast from research firm IDC says iOS market share among smartphones shipped this year will fall. At the same time, overall smartphone sales will grow in 2016, albeit at a modest rate.

IDC expects total smartphone sales to rise only 3.1% this year to 1.48 billion. Smartphones shipped that are powered by Google Android will rise 6.2% to 1.24 billion. iOS-powered smartphone shipments will decline 2% to 227 million. Of course, Android has the advantage that it runs across a multitude of smartphones while Apple’s iOS is essentially restricted to Apple products.

The authors of the study wrote:

According to a forecast update from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, smartphone shipments are expected to grow 3.1% in 2016, which is a substantial slowdown from the 10.5% growth in 2015 and 27.8% in 2014. Shipments are expected to hit 1.48 billion in 2016 and grow to 1.84 billion in 2020. The new forecast is 2.6 percentage points lower than IDC’s previous forecast for 2016 on the basis of the continued slowdown in mature markets and China.

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As for Apple in particular:

Apple is expected to face its first down year for iPhone in 2016 with shipments dropping from 232 million in 2015 to 227 million in 2016. The expected decline of 2% year over year is a significant change from past years’ growth and marks a pivotal moment for the company. IDC believes Apple can bring iPhone back to growth in 2017 and beyond supported by its early trade-in program as well as the lower cost iPhone SE. It continues to make inroads in China with development in tier 1 cities and is actively trying to penetrate higher growth markets like India and Middle East. The larger screen iPhone 6 Plus and 6S Plus will continue to grow its share of all iPhones shipped, increasing from 26% in 2016 to 32% in 2020.

Although the survey did not mention it, there may be good news for Apple when it launches the new version of the iPhone, presumably in September.

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Worldwide Smartphone Shipments by OS, Market Share, and 5-year CAGR, 2015-2020 (shipments in millions)
Platform	2016 Shipment Volume*	2016 Market Share*	2016 Year-over-Year Growth*	2020 Shipment Volume*	2020 Market Share*	2020 Year-over-Year Growth*	2015-2020 CAGR*
Android	1,240.5	83.7%	6.2%	1,565.3	85.1%	5.3%	6.0%
iOS	226.8	15.3%	-2.0%	267.1	14.5%	3.5%	2.9%
Windows Phone	11.2	0.8%	-61.6%	6.8	0.4%	-9.5%	-25.3%
Others	4.0	0.3%	-55.7%	0.5	0.0%	-9.7%	-43.1%
Total	1,482.5	100.0%	3.1%	1,839.7	100.0%	5.0%	5.0%
Source: IDC Worldwide Quarterly Mobile Phone Tracker, June 1, 2016

* Forecast data

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.