The smartphone market is getting saturated and companies will have to find new markets or reinvent to stay in the game.
Earmuffs Apple, Samsung, LG and Huawei (and many more)! Latest research from Gartner looks into the the state of the mobile industry and it isn’t good news for those smartphone manufacturers out there. Gartner believes that the growth in smartphone sales will fall to a single digit; half the rate it was in 2015. It is a bit difficult to attribute over 1.5 billion device sales as a slow down, but for companies who make their profit on
It is a bit difficult to attribute over 1.5 billion device sales as a slow down, but for companies who make their profit on scale, it is a very scary thought! Read: Golden oldie phones: three gadgets that showed us the future
The primary driver behind the doom and gloom is an age old problem. Everyone who can afford the product already has one, your market is disappearing at a rapid rate. China has been the last beacon of hope for manufacturers for the last couple of years, but the emerging middle class has been saturated with the help of local manufacturers like Huawei and Xiaomi selling devices almost at cost.
On the flip side of the coin, customers are holding onto smartphones longer these days. The combination of financial crises over the past decade and the technology level found in modern smartphones are pushing consumers to hold on to their phones far longer than the usual 24-month upgrade plan.
Gartner also highlights a fact that we have been highlighting on our Bandwidth Blog On Air podcasts – that manufacturers aren’t doing enough to woo customers into buying new devices. As the technology updates have “become incremental, rather than exponential,” there’s little reason to rush out on launch day to grab the latest handset.
India seems to be China 2.0 for smartphone manufacturers. They will, however, need to approach the market differently as feature phones are popular and you won’t make a profit if your device is priced above the average of $120 USD. Google’s Android One initiative might have some success in this market, as the company strives to build a smartphone at around $50 USD. Read: Google‘s Android One program set to make a comeback
The report does mention that there is space for companies to enter the complex and competitive smartphone market but that established players might be forced out in the near future. Gartner ends their report with saying that at least one “nontraditional phone maker” could become a top five player in China by 2018, which is entirely possible.