Tuesday, February 27

We are approaching the “peak smartphone”: runaway growth in sales has its days numbered

The mobile industry has several milestones. From the first mobile phones to the incorporation of cameras in them, ultimately decisive, through the iPhone in 2007 or the launch of Android in 2008. In these decades we have seen how they became more important in our lives, almost nuclear. However, the smartphone faces the crisis of the 50: he has a lot of life ahead of him, but with the feeling of approaching a waning future where what is to come will never be better than what has already been.

The nineties were the time of the GameBoy and the Discman. The 2000s were the years of the iPod and white headphones. The ten years of the smartphone as an extension of our hand. The twenty? Wireless headphones, smart watches and who knows if connected glasses come into play tomorrow. technology that It is leaving behind the mobile, which is losing prominence in favor of satellite accessories.

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Its own consolidation also contributes to this. Six, eight, ten years ago, the intergenerational differences were notable, and many terminals offered worthwhile returns in their second year of life. Today the differences from one year to the next are small and phones from a certain price resist a fourth year wonderfully. Simply, our phones better resist the passage of time and we have less incentive to renew it. Marta Pinto, research director at IDC for Europe, the Middle East and Africa, explains that “the improvements that manufacturers have achieved also mean that many of their customers are taking longer and longer to buy a new phone.” Global smartphone sales tell a story that fits this description.

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2021 was the year that sales grew again for the first time in five years, according to IDC data. Something that may have a lot to do with a disruption in demand during the pandemic. With few trips and social events to attend to in 2020, it’s likely that many put off their smartphone upgrade. In 2021, with a greater normalcy and vaccines on the horizon, the renewals arrived.

However, from that consultancy they have been pointing out for some time that there will be another revival of sales between now and 2025 thanks to the attractiveness of 5G and the gradual drop in the price of mobiles compatible with it. Even so, their forecasts do not invite us to think of a second youth for sales. Its optimistic projection in a relevant 5G scenario and cheap compatible terminals barely leaves the figure for the halfway point of the decade above 1,500 million units sold per year. Not much above the 2016 peak. And that’s not counting possible black swans. And from there, as Marta explains, a residual growth. The upward trend that emerging markets are still facing offsets the drop in sales in other “saturated” markets.

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Manufacturers of consumer technology, some more than some, have long promoted ecosystems of products rather than single categories. Before there were companies destined to launch only mobile phones. Today there is hardly anyone like that, especially among the relevant ones, which also present wireless headphones, smart watches, speakers and home screens, etc. A way to branch out the business to increase income that may end up being its salvation for when the lean cows come to the smartphone and sales can no longer continue to grow. After all, we are who we are on the planet and we are growing at a slower rate than phone sales have done.

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And there is not only the branching towards other types of devices. “The telephone is already beginning to become a commodities, as happened to the telecos, which have had to reinvent themselves since then. They have had to change their business model to add value to their product,” says Marta. The change in the business model of mobile phone manufacturers will also be a trend in this decade. “Apple, for example, there are already rumors that it will start to offer its hardware under subscription. Apple has even taken out a credit card to become a fintech“.

The post-PC era, misunderstood as “the era in which the PC disappears” and which really meant “the era in which the PC ceases to be the epicenter in favor of the smartphone, which inherits many of its functions”, may have Curiously, its continuation with the post-smartphone era: an era in which the mobile is losing functions that we are doing with other devices, although it will continue for many years in our pocket.

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Jan Stryjak, associate director of Counterpoint Research, a market research company specializing in the mobile industry, believes that there is still room for growth, especially globally in areas where the smartphone does not account for even half of mobile sales. mobile phones. And even in “advanced” markets like Europe there have been temporary drops in sales due to chip shortages and logistical problems.

However, he does believe that phone replacement cycles are going to lengthen, something that is eroding sales. “Especially as battery technology improves. One of the main reasons people replace their phones is because, after a few years, the battery no longer has enough charge to last a full day. But recently There has been a huge leap in battery charging technology, which means batteries last longer and can be charged much faster,” explains the director.

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