Will the smartphone slump continue into 2018? Well according to the recently released research by technology research firm, CCS Insight, it will… but not all hope is lost yet. The promise of 5G devices has the industry betting on a smartphone sales spike, though we shouldn’t expect that anytime soon – not until 2021, in fact.
The global demand for mobile phones is at a bit of a standstill compared to previous years, with sales steadily grinding to a halt. According to CCS Insight, only 1.95bn mobiles will be sold worldwide in 2018, up by only 0.2% from 2017. The company says its assessment comes from the combination of a gloomy picture in developed markets and a more positive outlook for some emerging markets, notably in Asia-Pacific and Africa.
Commenting on the latest forecast, Marina Koytcheva, CCS Insight’s VP, forecasting, notes, “After a challenging 2017, our analysis suggests it’s going to be a rough ride for phone-makers in 2018, particularly those targeting western markets. In 2018, we expect the Western European market to drop a further 7% and the North American market is starting to slow down too, dropping 3% year-on-year”.
With new smartphones offering little more than an incremental update on previous models, the company says it fears demand is unlikely to grow significantly for the next few years. Marina adds, “Consumers in mature markets have been underwhelmed by the latest crop of flagship smartphones. Price hikes for top-end devices, with some of the latest and greatest devices hitting $1,000, have certainly not helped, and it’s little surprise more customers have decided they might as well stick with the device they already own.”
The research firm notes that until recently, the North American market had remained somewhat sheltered from the smartphone downturn, primarily as a result of carriers pushing consumers toward upgrade programmes. However, now this upgrade cycle is almost complete, CCS Insight expects the US market to go in a similar direction to Western Europe, with the market facing a steady decline in the coming years.
It’s not all doom and gloom, however as Marina notes, “Although mature markets are suffering, there’s still growth potential in Africa, the emerging markets of Asia-Pacific, and India.
Looking further into the future, CCS Insight believes the balance between developed and emerging markets will remain relatively stable, resulting in the global market for mobile phones edging up very slightly over the next five years, eventually delivering sales of more than 2bn units in 2022.
With this in mind, CCS Insight believes that manufacturers are increasingly looking to 5G technology to reignite growth in mature markets. Marina comments, “The arrival of 5G handsets offers a glimmer of hope for embattled smartphone makers. They’re betting that this new, faster technology will give consumers a reason to upgrade their phones.”
With all that said, Marina is quick to caution phone-makers to be patient as they wait for this next wave of upgrade activity saying, “Although we expect the first 5G smartphones will hit the market in 2019, really significant demand won’t start until 2021, eventually having a positive impact in 2022, when we expect over 600 million 5G phones will be sold, accounting for 31% of the global market.”
The question on the lips of everyone here at NCN remains, will the smartphone slump be overcome by all 5G-enabled mobile devices, and, will CCS Insights’ research projections be correct? Is it reasonable to expect that the promise of 5G will reignite the smartphone flame that once burned so brightly? We are sceptical if it means smartphone prices will again, but nonetheless excited to find out.