Smartphone Sales Are Dropping Despite A Rise In Global Shipments For Q2 2016

Is there life without a smartphone? If so, what will replace it? Smartphone shipments show a persistent decline year over year. Saturated markets and high prices could be to blame, but what the industry really needs to figure out is, if the smartphone is on its way out, then what is on its way in?

Global shipments of smartphones improved worldwide in Q2 2016 after a disappointing first quarter, according to Canalys, but this recent uptick cannot disguise waning smartphone sales, particularly in the Western and Chinese markets.

Gartner is not wasting any time in bursting smartphone manufacturers’ bubbles either. It is projecting a significant drop in market growth from 14.4 percent in 2015 to just 7 percent in 2016 and shipments of only 1.5 billion smartphone units globally this year. What’s more interesting from Gartner is that smartphone sales peaked back in 2010 with market growth of 73 percent, which does make them seem rather passé.

Canalys reported global shipments of over 330 million units in Q2 2016, which was an improvement over a year ago, but not compared to Q1. Samsung was the leader in smartphone shipments, with about 80 million in total. Tim Coulling, Canalys Senior Analyst, credits the Galaxy S7 and the bundling of Samsung’s Gear VR for an increase in the average selling price.

Apple experienced an annual decline in iPhone shipments for the second year, shipping 40 million units. Canalys analyst Rushabh Doshi blames the high price of the iPhone SE for the decline in the China and India mass markets. According to Doshi, consumers defaulted to cheaper local vendors who offered better value. Huawei increased total shipments to 31 million, but that is a long way from the company’s shipment goals for the year of 140 million total units.

The slowdown in smartphone shipments reflects market saturation, particularly in Western markets and China, according to TechCrunch. Consumers are also less inclined to frequently upgrade their devices because the improvements are incremental and not worth the cost. India is the most lucrative market, where the average mobile device is $70 and sales of cheaper feature phones were over 60 percent of total mobile sales. This leaves room for companies such as Jolla, with its Intex Aqua Fish poised for imminent launch, to roll out upgrades.

There are any number of devices of all shapes and sizes that could come next in the gadget revolution craze— depending on one’s budget — from virtual reality to IoT to Samsung’s smart fridge to Pepper the robot and the growing number of items with smart technology. But will consumers ever really be able to put down their smartphones for good, or are they simply holding on to their devices for longer amounts of time?