The reasons why global smartphone shipments are declining?

Why are global shipments of smartphones declining?

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 Global smartphone shipments are declining.  Gartner predicts in an Oct 6, 2016 report that the worldwide shipment of mobile phones will decline by 1.6 percent in 2016 before gaining momentum again in 2017. Smartphone shipments to India have been declining in the last two-quarters but is expected to recover with 17% growth in the 2nd quarter of 2016 ( IDC Aug Report ).

 

The factors being attributed to this decline include:

1.      Durable Phones: Faster smartphones with metallic bodies and screen protectors mean less damage even after a period of aggressive use. Also, they are more resilient to software updates. As the phones last longer, demand for new phones shrink.

2.      Maturing Markets: Most Asian markets including India are maturing with mobile phone access now touching almost all of their population. Though the cycle of demand is expected to come from upgrades, especially in the developing markets where feature phones still hold a significant share of the pie.

3.      Slower upgrades and new adoptions:  As more and more people have smartphones, both upgrades and new adoptions have slowed for a period.

4.      Subdued reception to new phone launches: The iPhone 6s sales declined and the iPhone SE didn’t work out as expected for Apple. The iPhone 7 launch caused the sales to recover but the real challenge is sustaining this momentum.

According to a MacRumours report in November 2016, Apple’s suppliers will be revising the shipments of the iPhone 7 series phones between 5-15 per cent in November and December owing to the lower than expected demand from customers. According to analysts, the global recall of at least 2.5 million of its flagship smartphone Galaxy Note 7 could cost the firm nearly $5 billion. Samsung is still recuperating from the losses.

Though the global shipments are declining, most analysts are optimistic that it will recuperate over a period and new technology upgrades will fuel purchases.    

Posted in Research, Sales, Smartphones, Strategy and tagged , , .

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