Global smartphone sales look to have reached its peak, with new reports forecasting sales will no longer grow in double digits.

According to Gartner, smartphone sales worldwide will continue to slow, with the analyst firm expecting the market to grow at 7% in 2016 to reach 1.5 billion units, down from 14.4% growth in 2015.In 2020, smartphone sales are on pace to total 1.9 billion units.

"The smartphone market will no longer grow at the levels it has reached over the last seven years," comments Roberta Cozza, research director at Gartner.

Smartphone sales recorded their highest growth in 2010, reaching 73%.

Slowing Replacement of Phones

According to Gartner, the smartphone market has reached 90% penetration in the mature markets of North America, Western Europe, Japan and Mature Asia/Pacific, slowing future growth. Furthermore, users in these regions are not replacing or upgrading their smartphone as often as in previous years.

"In the mature markets, premium phone users are extending life cycles to 2.5 years, which is not going to change drastically over the next five years," explains Cozza.

Communications service providers (CSPs) have moved away from subsidies providing a ‘free' smartphone every two years, which has led to more varied upgrade cycles, she says.

On the other hand, CSPs have introduced financing programs and vendors such as Apple now offer upgrade programs that provides users with new hardware after only 12 months.

"These programs are not for everyone, as most users are happy to hold onto their phone for two years or longer than before,” Cozza says.

“They do so especially as the technology updates have become incremental rather than exponential.

Gartner says in emerging markets, the average lifetime of premium phones is between 2.2 and 2.5 years, while basic phones have an average lifetime of three years and more.

"2015 was the year when sales of smartphones overtook those of feature phones for the first time in Sub-Saharan Africa,” Cozza says.

“This region represents an attractive market for vendors that can persuade users to migrate to their first smartphone," she explains.

India Is the Main Focus for Growth Opportunity

According to said Annette Zimmerman, research director at Gartner, because mature markets are saturated, the focus for many vendors is on India and China.

"India has the highest growth potential," she says.

"Sales of feature phones totalled 167 million units in 2015, 61% of total mobile phone sales in India."

Smartphones are expensive for users in India, but with the average selling prices (ASPs) of low-end models falling, Gartner estimates that 139 million smartphones will be sold in India in 2016, growing 29.5% year over year. ASPs of mobile phones in India remain under $70, and smartphones under $120 will continue to contribute around 50 percent of overall smartphone sales in 2016.

After recording growth of 16% in 2014, sales of smartphones in China were flat in 2015.

"In this saturated yet highly competitive smartphone market, there is little growth expected in China in the next five years," says. Zimmermann.

“Sales of smartphones in China represented 95% of total mobile phone sales in 2015. Similar to India, falling ASPs for smartphones will make them more affordable for users,” she explains.

"The worldwide smartphone market remains complex and competitive for all mobile phone vendors, and we are not expecting the vendor landscape to get smaller," Zimmermann adds.

"In such a fluid vendor landscape, some will exit the market while newcomers, including mobile manufacturers or internet service providers from China and India, could make their debut."

Gartner forecasts that by 2018, at least one nontraditional phone maker will be among the top five smartphone brands in China.

"Chinese internet companies are increasingly investing in mobile device hardware development, platforms and distribution as they aim to grow their user bases and increase user loyalty and engagement," Zimmermann says.