Smartphone growth will continue at nearly 10 per cent annually through 2018, but that's well behind increases in recent years.
IDC said Monday that global smartphone shipments in 2014 will reach nearly 1.3 billion units, an increase of 26% over 2013. But for 2015, IDC predicted, 1.4 billion smartphones will ship to retailers, only a 12% increase over 2014.
In many markets, the slowdown is happening because so many users already have smartphones and keep them longer in some cases.
Also, smartphone prices are dropping dramatically, primarily because of several Chinese manufacturers. Premium phones like the iPhone 6 will keep their average selling price, but better specs are turning up in more affordable models, IDC said.
"Consumers no longer have to go with a top-of-the-line handset to guarantee decent hardware quality or experience," said Melissa Chau, an IDC analyst, in a statement.
For all of 2014, the average selling price of smartphones will be $US297 (with no subsidy), and then drop to $US241 by 2018.
Android will dominate shipments in 2018, reaching about 80 per cent (a decline from 82 per cent in 2014). Meanwhile, iPhone will drop to 12.8 per cent over the same period, compared to 13.8 per cent in 2014. By 2018, iPhone will have 34 per cent of all smartphone revenues, compared with 61 per cent for Android.
IDC said Android's dominance will hurt new operating systems like Tizen and Firefox. Newer OSes won't be able to compete on lower prices and will need to offer a "radically different appeal to gain any significant traction," IDC added.