Fall­ing sales growth could be the pre­cur­sor to chang­ing con­sumer dy­nam­ics

The Financial Express - - COMPANIES -

AF­TER years of un­bri­dled growth, the global smart­phone mar­ket seems to be en­ter­ing a pe­riod of slow­ing growth. Ac­cord­ing to the In­ter­na­tional Data Cor­po­ra­tion (IDC), smart­phone sales recorded the small­est y-o-y growth in Q1 2016—a mere 0.2%—to 334.9 mil­lion from 334.3 mil­lion (Q1 2015). The world seems to have “mo­bile phone fa­tigue.” The slow­ing sales can be at­trib­uted to mul­ti­ple rea­sons—sat­u­ra­tion in key de­vel­oped and emerg­ing mar­kets, the slow­ing Chi­nese econ­omy and the fall in the sales of Ap­ple and Sam­sung de­vices. This quar­ter marks the first time that iPhone sales have de­clined since the iconic de­vice was launched in 2007. That is pri­mar­ily be­cause there has been noth­ing truly new from the brand in a long while. De­spite In­dia be­ing a bright spot—iPhone sales grew by 56%, though over a low base, and Sam­sung widened its mar­ket-share in the coun­try—glob­ally, Ap­ple is down 10 mil­lion units (16.3 %) from 61.2 mil­lion to 51.2 mil­lion, while Sam­sung slipped 0.6% from 82.4 mil­lion to 81.9 mil­lion.

For Chi­nese hand­set brands, it has been a mixed quar­ter. While Len­ovo is no more among the Top 5 brands, Xiaomi sales are down. Huawei (58.4%), OPPO (153.2%) and Vivo (123.8%) have notched huge gains. The big sur­vivor is Huawei which is still in the Top 5 list. What’s ev­i­dent is that in a slow grow­ing global econ­omy, peo­ple are post­pon­ing pur­chase of new mo­bile de­vices. While do­ing so, they are look­ing for cheaper de­vices that de­liver al­most the same ex­pe­ri­ence as mar­ket lead­ers. It’s time hand­set ven­dors tried to match the sen­ti­ments of the global mo­bile con­sumer. Else, it could be tough days ahead for them.

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