With sales declining, mobile phone makers will have to find new ways of keeping consumers interested.
Global smartphone sales are slowing. International Data Corporation (IDC) recently reported that smartphone vendors shipped 403.5 million units during the fourth quarter of 2017, down 6.3 percent on the same period the year before.
Market analysts have presented several reasons for this. First and foremost, they see the emergence of a longer replacement cycle in the world’s two largest markets, China and the United States, whereby consumers hold onto their phones for another year because the existing features serve them well, while new features and upgrades are not seen as significantly better.
The decline in demand loomed large over last month’s Mobile World Congress (MWC) in Barcelona.
Samsung introduced its latest flagship, the Galaxy S9. While Sony launched its Xperia XZ2 and XZ2 Compact, and LG unveiled its V30S ThinQ. While realizing that change is required to stimulate sales, the current approach by all these manufacturers seems to be a focus on high performance dual cameras and improved functionalities of artificial intelligence, cloud-based services, and augmented reality.
There are signs that manufacturers are, for now, settled on riding out this painful period until the next big leap in technology arrives in the form of 5G enabled devices, probably in 2019. That will trigger a new phone replacement cycle.
Another avenue for sales growth will be smart devices in general, not just phones, as mobile technology is increasingly used across industries. This requires all sorts of partnerships with electronics, automobiles, home appliances and other manufacturers. Several such cooperation agreements were announced at MWC 2018.
On another note, prominent industrial designers believe that the ‘sameness’ in how devices look today could be another reason for the decline. All smartphones from all manufacturers have a minimalist design of a full frontal black screen, with a thin bezel and a single color back. What exasperates the problem further is the similarity of the design of the same company’s generations, like the Samsung S8 and S9 or like the Apple iPhone 6S, 7 and 8. But Apple had picked up on this and created a different looking new model in the iPhone X last year, which actually bucked the trend slightly. Though its sales have been lower than initially projected, the iPhone X managed to shorten the typical replacement cycle of iPhone users and generated more store visits and inquiries than recent previous generations. Meanwhile, companies like Nokia, which are trying to re-enter the mobile market are counting on retro-designs to succeed. At MWC, Nokia released an updated version of its classic banana-shaped 8810. Perhaps a return to a physical keypad, sliding cover or even a flip phone could be the answer?
Sometimes, it seems all the elements of a perfect storm gather to derail an industry that has had an amazing run. This could be happening with the smartphone industry. To top it all off, a study by Kantar TNS has shown that mobile use has fallen, for the first time, among young users in the UK between the ages of 16 and 24. This generation of smartphone buyers is showing signs of device fatigue and a backlash against screen time. It is time for a re-think in the world of mobile devices.