By Melodie Warner
Market-researcher International Data Corp. expects a 4% increase in world-wide shipments of mobile phones during 2012, the lowest annual growth rate since 2009, due to a sharp decline in the feature phone market and sluggish global economic conditions.
IDC expects vendors to ship nearly 1.8 billion mobile phones this year, up from 1.7 billion in 2011. The firm also projects shipments of 2.3 billion mobile phones by the end of 2016.
IDC said many owners are holding on to their feature phones, sometimes known as "talk and text" devices, in light of the owners' uncertain job and economic prospects. Despite the expected decline in feature-phone shipments, the devices will still comprise 61.6% of the total mobile phone market this year, IDC said.
Meanwhile, the smartphone market should largely offset the feature-phone decline with shipments forecast to grow 38.8% to 686 million units this year. IDC said the high demand for smartphones is being fuelled by high carrier subsidies, falling average selling prices and component costs, increased awareness and device diversity, and lower-cost data plans.
"The mobile phone user transition from feature phones to smartphones will continue in a gradual but unabated fashion," said Kevin Restivo, senior research analyst with IDC's Worldwide Quarterly Mobile Phone Tracker. "Smartphone growth, however, will increasingly be driven by a triumvirate of smartphone operating systems," namely Google Inc.'s (GOOG) Android, Apple Inc.'s (AAPL) iOS and Microsoft Corp.'s (MSFT) Windows Phone 7.
IDC projects Android will remain the most shipped smartphone operating system over the next five years, though its market share will peak this year at 61%.
IDC expects Windows Phone 7/Windows Mobile to become the No. 2 operating system with more than 19% share in 2016, assuming Nokia Corp. (NOK, NOK1V.HE) maintains its foothold in emerging markets.
In the meantime, iOS will continue its impressive run this year, thanks to strong iPhone 4S momentum in North America, Western Europe and Asia, specifically China, IDC said. The firm expects iOS to end 2012 with a 20.5% market share.
Write to Melodie Warner at firstname.lastname@example.org
(END) Dow Jones Newswires
June 06, 2012 08:20 ET (12:20 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.