The Smartphone Market Might Grow Less Than Expected

In a report published Thursday, Citigroup analyst Ehud Gelblum suggested that a global smartphone slowdown is expected in 2015, reflecting a smartphone slowdown in China.

Gelblum expects total smartphone shipment growth of 15.5 percent in 2015, down from prior estimates of 19 percent growth. The downward revision is attributed to an expected 12 percent growth in Chinese smartphone shipments throughout the year, as opposed to prior estimates of 21 percent growth.

The analyst cited Chinese smartphone shipments were flat at 103 million to 107 million in all four quarters in 2014, even as LTE penetration ramped from 9 percent in the first quarter to 76 percent in the fourth quarter.

Gelblum also noted that smartphone vendors generally price their devices in U.S. dollars, thereby increasing the cost to consumers in "price sensitive markets." As such, Western Europe smartphone shipment estimates are now estimated to be flat in 2015 after growing 6 percent in 2014. Latin American growth is expected to decelerate to 18 percent growth in 2015 after growing 37 percent in 2014.

Apple Inc. (NASDAQ: AAPL) is expected to continue losing global smartphone market share, according to Gelblum who noted that manufacturers that sell lower-end smartphones will see market share gains. Apple's smartphone share in the global market is expected to drop to 12 percent by 2017 from 15 percent in 2013.

Samsung Electronics Co Ltd (OTC: SSNLF) will also see its global market share dip to 22 percent by 2017 from 31 percent in 2013.

From an operating system perspective, Android will grow its share to 84 percent by 2017 from 79 percent in 2013, while iOS falls to 12 percent from 15 percent over the same period.