The smartphone market had been on a constant growth trajectory since the introduction of the smartphone, but in the latter half of the 2010s, it began to stagnate; leading to lengthened purchase cycles and a precipitous decline in shipments.
This stagnation is the result of how, in many ways, smartphone manufacturers have satisfied consumers’ baseline demands by creating handsets with stylish displays, high-quality cameras, reliable battery life, and fast connectivity. These features were successively introduced over the course of several smartphone generations and provided an impetus for consumers to regularly upgrade their handsets.
As the 2010s ended, however, smartphone innovation hit a plateau and a sense developed among consumers that they no longer had to regularly upgrade their handsets, owing to the consistency of features across devices and price points.
It is also likely that as ‘right-to-repair’ laws become popular, these will further lengthen purchase cycles, as consumers will no longer need to purchase new handsets in cases where their current model is damaged. These laws are designed to encourage companies such as Apple and Microsoft to make spare parts and tools, and provide information on how to repair faulty devices available to consumers and independent repair shops, with the overall aim of reducing electronic waste, which according to the UN (United Nations), represents the fastest-growing waste stream globally.
It is probable that ‘right-to-repair’ laws will further expand smartphone purchasing cycles. The effect of these is unlikely to be felt in the short term, but as consumers become more familiar with these services, a sizable proportion will undoubtedly choose to repair their old handsets, rather than purchasing a new one.
It is likely that the smartphone market will not see meaningful growth until another significant upgrade becomes available to the majority of consumers, not just those capable of purchasing high-end premium handsets. In addition to developments such as foldable handsets and biometrics, smartphone manufacturers are anticipating that the widespread introduction of 5G handsets will serve to reinvigorate the market, in much the same way that the introduction of 4G in 2010 boosted the sales of OEMs, such as HTC and Samsung.
The introduction of these handsets will prove an attractive proposition for consumers. Unlike previous generations, where top-of-the-line features were paywalled behind premium offerings, it is likely that OEMs will distribute 5G handsets at a variety of price points to quickly capture market share, as well as boosting adoption of third-party services leveraging the enhanced speeds offered by 5G.
However, in countries outside China, South Korea, and Japan, the primary obstacle to the growth of 5G smartphones is 5G network limitations. For the most part, emerging economies do not have established 5G networks and, while many nations have trialled 5G networks, implementation of complete networks in those nations is likely to take many years. The full impact of 5G will also not be seen immediately, as most connections will still be running on a 4G or slower network and more than half of the global population will not be covered by 5G.
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