Here's why the iPhone isn't going to catch up to Android any time soon
Research firm IDC is forecasting that Android will retain its 81.1% worldwide market share of smartphone sales right through to 2019, as it predicts a dramatic slowdown in global growth - a 10.4% increase in 2015, down from 27.5% in 2014. IDC also forecasts a compound annual growth rate (CAGR) over the next five years of just 7.9% across the industry.
So where does the iPhone fit into this? Looking forward, IDC says that "markets with the biggest growth opportunity are extremely price sensitive." This translates into new consumers in emerging economies looking for low-cost smartphones - a demographic with which Apple is unlikely to make any significant in-roads.
Right now, the Android market is cut-throat. Profit margins are razor-thin - LG makes just a penny in profit per device - and established players like HTC are imploding, while dirt cheap Android handset manufacturers like Huawei and Xiaomi are enjoying stratospheric rises.
Previously, the Chinese market has been a key driver of these companies' growth. But this year, it saw a significant slowdown in sales growth due to a maturation of the market - and as such is also in large part responsible for the global slowdown. In 2014, the Asian nation saw a 19.7% growth in smartphone sales; in 2015, IDC is forecasting growth of just 1.2%.
Because of China's rising middle class, it has also been an important target for Apple, which launched an aggressive retail expansion in the country in 2015. Earlier this week, CEO Tim Cook even took the unusual step of emailing CNBC host Jim Cramer in response to the country's growing economic malaise to say that everything is fine.
But even as the Chinese smartphone market's overall growth slows, there may still be room for expansion for Apple, by targeting higher-end Android owners and encouraging them to make the jump to iOS. Low-end manufacturers, however, will be forced to look elsewhere to maintain growth.
Xiaomi is expanding into Latin America as well as a number of other Asian countries including India, which IDC highlights as a promising market. "China clearly remains a very important market. However, the focus will be more on exports than consumption as domestic growth slows significantly," said IDC program director Ryan Reith. "India has captured a lot of the attention that China previously received and it's now the market with the most potential upside. The interesting thing to watch will be the possibility of manufacturing moving from China and Vietnam over to India. We've begun to see this move as a means to cut costs and capitalize on financial benefits associated with localized India manufacturing. It is the local vendors like Micromax, Lava, and Intex that will feel the most pressure from international competition within its market."
Here's IDC's data:
In short: Even as previous Android-heavy markets mature, new ones will continue to grow across the globe. As tens of millions of people in emerging markets start buying smartphones, the ongoing Android price war will make the platform more attractive than ever - securing Google's lead for years to come.