Smartphone Sales Are Slowing

Sincere House Shop (closed)

I saw signs of the smartphone market contracting while in Hong Kong this past January. While visiting the famous Sin Tat Plaza in Mong Kok—an entire mall devoted to mobile tech—it struck me that a significant number of shops were closed, with most of the activity limited to the lower floors of the building.

Yesterday Android Authority added some hard numbers to my anecdotal observations, nicely summarizing recent smartphone sales data from both Strategy Analytics and IDC. The good news: 1.4 billion smartphones were shipped globally last year, a 10% increase over 2014 and the most units shipped in the market’s history.

The bad news: The rate of growth is down significantly—12.3% for all of 2015 vs. 31% for 2014, and just 6.4% in Q4 2015 compared to 31% in Q4 2014. That’s the worst growth rate that the industry has ever seen.

Samsung’s profits are down 40%, and Apple is predicting its first drop in sales since 2003. So what’s going on?

IDC calls it a “more mature growth pattern”; I call it market saturation. Basically, everyone in North America, Western Europe and now China who wants a smartphone has now got one. And since smartphones are getting better and better I suspect that users are upgrading their hardware less often.

This would also explain why OEMs are falling over each other to get a foothold in emerging markets—like India, for example.

Now for the really good news: As the smartphone market gets increasingly saturated—sorry, “mature”—handset pricing will be a bigger differentiator than ever before.

Source: Android Authority

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