Smartphone revenue growth stalled in Q4 2015, projected to be flat in 2016

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    The golden age of smartphone growth ground to a halt in 2015, and the industry can expect continued pain in 2016, according to a new report.

    According to the latest Quarterly Smartphone Tracker from market research firm GfK, revenues from smartphone sales in the fourth quarter of 2015 dipped slightly to $115.2 billion, down .2 percent from the same period a year ago.

    During that same period, a record number of handsets were actually sold: 368 million units, up 6 percent year over year. However, commoditization caused the average selling price to tumble 6 percent in the fourth quarter.

    The numbers are the latest confirmation of an industry in transition. Since the release of the first iPhone in 2007, the mobile industry has been on a bullish run — but that has lost steam.

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    At the recent Mobile World Congress in Barcelona, with revenues from handsets hitting a plateau, mobile firms emphasized everything from virtual reality to Internet of Things gadgets to smartwatches as they searched for new avenues of growth.

    Even Apple, which is not getting hit as hard by falling average selling prices as Android handset makers, is still projecting a year of little or no growth in its iPhone business and has seen its stock fall by 26 percent since last summer.

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    GfK’s Kevin Walsh, director of trends and forecasting, emphasized that the picture on the ground can vary wildly by geography. For instance, India saw device sales soar by 34 percent in the fourth quarter, but driven overwhelmingly by phones that cost less than $100. China grew by 12 percent, while sales in North America fell.

    But overall, what growth there is to be had is among increasingly cheaper phones.

    “Despite a record fourth quarter — and a strong performance in 2015 in general — there are mixed results across countries,” Walsh wrote in the report. “Local factors, rather than regional and industry trends, are increasingly driving markets. Diverging economic trends, device saturation, mass market adoption, politics, social change and even sport have an impact on smartphone demand and prices at country level.”

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    For the current year, GfK forecasts the basic trends to continue: Growth will keep going for cheaper handsets. The number of handsets sold will grow from 1.308 million in 2015 to 1.4 million in 2016. But revenue will remain flat, only increasing .5 percent to $401.3 billion.

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