SANTA CLARA, CA — Smartphone shipments are forecast to reach 567 million in 2012, and nearly double by 2016 as new phones, like this week’s anticipated iPhone 5, continue to enter the market.

But despite the excitement surrounding the new iPhone, the volume of new smartphone shipments is lower than expected. NPD DisplaySearch downgraded its 2012 forecast of new purchases from 220 million to 230 million to 177 million. The volume of replacement phones, however, is expected to increase as new smartphones enter the market.

Says Hiroshi Hayase, vice president, small/medium displays for NPD DisplaySearch: “Apple’s iPhone 5 will be a key product for the smartphone market in the second half of 2012. Apple shipped more than 140 million phones in 2010 and 2011, so we can expect smartphone shipments to continue flourishing as users upgrade to the new iPhone.”

Figure 1: Smartphone Shipment Forecast

Source: NPD DisplaySearch

“The timing of mobile phone contracts can also impact the smartphone market,” said Hayase. “More service providers are likely to shorten mobile phone replacement cycles in an effort to boost sales.”

In addition to creating excitement in the smartphone market, Apple’s iPhone 5 is expected to implement new component and system technologies. NPD DisplaySearch expects that Apple will use a slightly larger display (4”, up from 3.5”). It will have the same Retina display with 326 ppi, which will result in a wider screen format of 1136 × 640 pixels. One of its most anticipated new technologies is in-cell touch, using a touch sensor integrated into the display panel. This approach can improve the performance of the display, and most importantly, reduce the thickness of the display-sensor combination by as much as a half-millimeter. NPD DisplaySearch expects Apple to utilize the space for a larger battery for less frequent charging.