Long-soaring smartphone market heading to earth
SAN FRANCISCO: After a decade of sizzling growth, the smartphone market has suddenly cooled.
Surveys show smartphone sales last year shrank slightly for the first time since the 2007 debut of the iPhone, and preliminary data this year suggests further deceleration.
Analysts say several factors have hit the smartphone market including the lack of new features that wow consumers, people holding their devices longer and the saturation of key markets including China, which had been driving growth.
“The market has peaked, that is the bottom line,” said Bob O’Donnell, analyst and consultant with Technalysis Research.
“It is for sure not the death of the smartphone; it is the death of the growth of the smartphone market.” The smartphone market began to hit saturation in 2016 much the way the tablet and personal computer markets did years earlier.
It is for sure not the death of the smartphone; it is the death of the growth of the smartphone market.
“It doesn’t mean it is not a strong market – it is a huge market – but it means vendors have to think differently,” O’Donnell told AFP.
Smartphone sellers with slices of the market should no longer count on a fast-growing pie and instead rely on shrewd competitive moves to ramp up revenues, according to analysts.
Samsung remains the market leader, according to surveys, but its lead over Apple has slipped.
China’s Huawei is holding the number three spot and rival Chinese maker Xiaomi has been growing rapidly despite the lack of a US presence. International Data Corporation ( IDC) said 2017 smartphone sales fell 0.1 per cent to 1.472 billion devices, largely due to weak fourth quarter shipments.
IDC expects another decline in 2018 before a rebound from new phones for 5G networks and India’s vibrant market.
The ‘ biggest driver’ of the downturn last year was said by IDC and others to be the China market.
IDC forecast that the smartphone market in China would flatten out next year, while sales in India were expected to continue to boom on low-priced handsets.
“China remains the focal point for many given that it consumes roughly 30 per cent of the world’s smartphones,” IDC analyst Ryan Reith said.
A catalyst for a smartphone rebound may be the arrival next year of devices tailored for ultrafast 5G telecommunications networks, according to IDC.
Bob O’Donnell, Technalysis Research analyst and consultant