Google Inc (GOOG)(GOOGL)’s Android Share Increases, Smartphone Growth Expected To Slow

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After witnessing a 27.5% growth in smartphones in 2014, the growth rate of the global smartphone shipments will slow down to 10.4% in the current year, according to IDC. Significantly, Google Inc (NASDAQ:GOOGL)’s Android OS has a market share of 81.1% by recording 9.9% YOY growth in volume to 1.16 billion shipments in the current year. However, Apple Inc. (NASDAQ:AAPL)’s 16.1% YOY volume growth to 223.7 million units will ensure a market share of 15.6% for its iOS.

Reduction In Forecast

The latest IDC forecast is a reduction from the earlier outlook of 11.3% for the current year. The research organization said that it sees a perceptible slowdown in smartphone shipments as China will join the more mature growth pattern of North America, as well as, Western Europe. The growth in the unit shipments will come because of a steady drop in average selling prices.

For the five-year period ending 2019, IDC expects Google Inc (NASDAQ:GOOGL)’s Android to maintain its share of 81.1% with five-year CAGR of 7.8% compared to the overall 7.9%. However, Apple Inc. (NASDAQ:AAPL)’s iOS market share will drop down to 14.2% at the end of the year 2019 from 15.6% as it will record 7.0% CAGR during the five-year period. The unit shipment of Android and iOS at the end of the year 2019 will be 1.54 billion and 269.6 million units respectively.

Windows Phone To Gain

There is something to cheer for Microsoft Corporation (NASDAQ:MSFT) from the IDC forecast. For the current year, Windows phone will have a market share of 2.6% by recording 5.8% YOY unit growth to 36.9 million units. However, for the five-year period ending in 2019, Windows phone will have a market share of 3.6% by recording 14.2% CAGR of volume to 67.8 million units.

Cheaper smartphone’s OS market share will be less than a percentage point at 0.8% in the current year. That is due to the 15.5% expected drop in the unit shipment to 11.5 million units. For the five-year period, its market share will grow to 1.2% driven by 11.0% CAGR of units to 23.0 million at the end of the year 2019.

China Remains Focal Point

China continued to remain the key point of the worldwide smartphone market despite the fact that the conditions were not as good as it was in the earlier years. For instance, in 2014, China’s consumption of new smartphone shipments was 32.3%. In the current year, IDC expects China to witness only 1.2% growth in the smartphone sector.

For the five-year period, China will continue to be the biggest market. However, its market share will drop down to 23.1% in 2019 while emerging markets such as India will continue to expand. While some of the Chinese cheaper smartphone also uses Google Inc (NASDAQ:GOOGL)’s Android, the same cannot be said in the case of Apple Inc. (NASDAQ:AAPL)’s iOS. Therefore, the loser will be the technology bellwether.

Worldwide Smartphone Forecast by OS, Shipments, Market Share, Growth and 5-Year CAGR (units in millions)

Region

2015* Shipment Volumes

2015* Market Share

2015* YoY Growth

2019* Shipment Volumes

2019* Market Share

2019* YoY Growth

5-Year CAGR

Android

1,164.3

81.1%

9.9%

1,541.9

81.1%

5.0%

7.8%

iOS

223.7

15.6%

16.1%

269.6

14.2%

3.3%

7.0%

Windows Phone

36.9

2.6%

5.8%

67.8

3.6%

12.8%

14.2%

Others

11.5

0.8%

-15.5%

23.0

1.2%

8.6%

11.0%

TOTAL

1,436.5

100.0%

10.4%

1,902.3

100.0%

5.1%

7.9%

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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