For a long time, the smartphone has appeared to be such a necessity for an increasing number of people in the world that it seemed sales would never slow. With an apparently limitless number of functions in an ever-more digitised and connected world, the only question in the growing market has been for consumers to watch the phone manufacturers battle it out, while smaller emerging companies try to take their share of the apple (no pun intended).
But all of this has changed in the last year, and the ‘smartphone plateau’, wherein technological innovation slows and phone sales level off, has come to an end and a downward direction has begun.Research from Counterpoint showed a decline by 4% of global smartphone sales in 2018, which fell from 1.56 billion units in 2017 to 1.49 billion the following year. In addition to this, research organisation CCS Insight predicts a further fall of 2% in 2019, suggesting that the decline is not merely a blip in a steadily increasing trend.
The world’s largest mobile phone market, China, showed a fall of 13% in 2018 and is forecast to decline by 9% in 2019. While there are a number of emerging markets in India, Indonesia, Russia and Vietnam, with shipments in China at almost a third of the worldwide total, it would take some more drastic changes to tip the balance. The growth in mobile phone sales in India is projected to be 5% in 2019, and while this is down from 10% in 2018, it still shows a growing market which manufacturers like Xiaomi are attempting to exploit while the opportunity remains.
In the US, the second quarter of 2018 showed a decline of as much as 22%, and in 2019 the projected annual decline is 9%. Apple announced in November 2018 that it would stop reporting quarterly sales, a decision that seemed to suggest an acknowledgement of the company’s decline in phone sales since 2015.
Yet while iPhone, Android and their competitors are suffering or stagnating, an industry that is inextricably linked to the smartphone is doing quite the opposite.
The mobile app industry is continuing to experience massive growth with no signs of slowing.Global mobile app revenues were $69.7 billion in 2015, $88.3 billion in 2016, and with a projected $188.9 billion in 2020, mobile apps seem to be growing almost exponentially while the devices they’re intended for experience a slump.
As 25% of small and medium enterprises (SMEs) have seen considerable growth due to their use of mobile technologies, an increasing number of businesses have wanted to make the most of all technologies available to them, as well as those migrating to cloud. To help with the extra workload,IT support services for companies in London are available to offer a range of solutions in a way that has not been possible in the past.
Despite the slowing of smartphone sales, there are 2.71 billion smartphone users in 2019, which from a population of around 7.7 billion means approximately 35% worldwide. The number of mobile app downloads reached 178.1 billion in 2017 and is forecast to exceed 250 billion by 2022.55% of the growth in mobile apps by 2020 is predicted to be in games, while recent years have also seen a huge growth in mobile payments. New developments in technology and security also suggest that this is likely to continue in the near future. With those aged over 25 checking their phones an average of 265 times a day, and 390 times for those aged 16-24, mobile apps don’t appear to be losing any appeal for the moment. The taste for mobile apps is far from being sated, especially in China where there is the most room for growth in the app market.
So how can mobile phones be failing the customer while mobile apps are stronger than ever before?
One possible reason, as suggested by Linda Sui, Director of Strategy Analytics, is the “longer replacement rates and lack of wow models”. Consumers feel less inclined to make a new purchase when the new phones offer no great improvements on the previous models, and the existing phones don’t feel especially dated.
Another factor could be the pricing of the flagship models, which have been asking for too much by exceeding the $1000 mark in the US, and this psychological barrier may be enough to discourage the consumer. On the other side of the planet, the drop in sales could be due to a weakened Chinese economy, and manufacturers are just waiting for the recession to pass.
But in the bigger picture, could it be that we as consumers have lost our enthusiasm for smartphones without feeling the need to give up the technological necessities that are part of everyday life in the 21st century?
With the rise of home assistants, voice assistants, tracking devices and IoT, it may well be that the variety of new advancements in technology will lessen the need to have our pockets weighed down by the ubiquitous rectangle, and our finger muscles given a daily workout. Thanks to the help of fast progressions in the cloud computing industry, there’s no need for our devices to be small in number, so perhaps the new decade will bring a range of devices with easier access, and the mobile phone that has defined technology in recent years will eventually become obsolete.