For several years, we have seen stories of doom about the smartphone market, specifically that the bubble is bursting. Smartphone shipments have been declining slightly. There is an argument that success for smartphones in China has stopped the bubble bursting. However, that could be changing as shipments fell in China during 2018.
Not just by a small amount. Indeed, the China Academy of Information and Communications Technology (CAICT) says shipments fell 15.5 percent during the year. The Ministry of Industry and Information Technology’s research institute said 390 million units were sold.
Market research company Canalys echoes the decline, although the firm pegs the drop at 12 percent. However, Canalys says more than 400 million units were shipped. Still, that will likely change in 2019, where the company expects shipments of below 400 million for the first time since 2014.
A further decline is expected in China this year. The Chinese smartphone market is the biggest in the world, so a continued decline in the country will have an effect across the industry. Indeed, Canalys says the 2018 drop in China could mean a 1% decline in the global market.
Even the giants are feeling the strain. Samsung has recently announced financial results far below expectations. Apple has taken the rare step of cutting its quarterly sales forecasts as iPhone sales drop.
While we will hold off on claiming the end of the smartphone boom is near, there are some interesting things happening.
One of the things smartphone manufacturers did well was to convince users to upgrade devices every one or two years. In many ways it was a trick built on telling consumers they needed the latest and greatest. It is something other tech areas have failed to do.
There is an idea customers are becoming more knowledgeable and will lengthen their refresh cycles. Furthermore, manufacturers are doing themselves no favors by pricing many devices too high. Samsung and Apple have both increased the price of their flagships by hundreds of dollars in recent years.