Here’s a straw in the wind: 2017 was the first year that smartphone shipments declined.
That (global) statistic is from Jake Swearingen’s report on the future of the smartphone industry for New York Magazine.
If you don’t give a fig for the future of the smartphone industry, then don’t hang-up – because it illustrates something of great importance to the future of the entire economy.
We’ll begin with a little recent history:
“From roughly 2007 until 2013, the smartphone market grew at an astonishing pace, posting double-digit growth year after year, even during a global recession. They were the good years… millions and then billions of smartphones going out; billions and then trillions of dollars in rising company valuations; every year new models of phones hitting the market, held up triumphantly at events that were part sales pitch, part tent revival.”
Double-digit growth during the deepest recession since the war? Who wouldn’t want to be in that business? But remember the wise words of Herbert Stein: “If something cannot go on forever, then it will stop.”
Why smartphone sales growth can’t go on forever (or at least for a while yet) is an interesting question. Market saturation is one answer – pretty much everyone has one of the blasted things (I’ll come on to the developing world later). Another factor is that we’re not upgrading as fast as we used to:
“…there’s no doubt that the replacement cycle for phones is elongating. ‘Over the last five years, the replacement cycles of smartphones in the U.S. has has increased from an average of 20.6 to 24.1 months,’ says Jennifer Chan, global insight director at Kantar. More worrying for smartphone manufacturers is that desire for new technology doesn’t really spur consumers to buy new phones.”
The underlying problem is that the latest smartphones are both too good and not good enough.
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