Smartphone manufacturers hope the advent of 5G will provide a boost to sales as another piece of research suggested market saturation is a real issue.
A study by GSMA Intelligence found that 80 per cent of people in developed nations now owned a smartphone and only replaced their device every three and a half years – a significant increase from the 2 years in 2011-12.
Manufacturers are becoming increasingly concerned after nearly a decade of market growth. Several factors have been cited as reasons for the decline, including rising cost of devices, a lack of innovation and the erosion of operator subsidies in some markets.
Last week, Apple sent shockwaves through the mobile industry and stock markets after it readjusted its quarterly guidance following lower than predicted iPhone sales. Aside from the aforementioned trends, Apple was particularly susceptible to a downturn in demand in China given its success in the country and its relative lack of presence in other emerging markets.
Samsung has also seen sales fall but Chinese phone makers like Huawei and Xiaomi have fared well in their homeland and developing nations because of their competitively priced, feature packed handsets and because consumers there are less brand loyal. Both firms are now targeting Western Europe too.
The GSMA Intelligence report says that just five countries – China, India, Nigeria, Indonesia and Pakistan – will account for half of the 1.5 billion new mobile Internet users between now and 2025.
5G is also a source for optimism. The first compatible handsets will be made available alter this year, with Samsung, Huawei, Sony and LG expected to get in on the act. Apple, meanwhile, is expected to wait until 2020.
However adoption could be stifled by a lack of consumer awareness. Only half of people understand 5G means faster speeds and only a quarter expect 5G networks to deliver new types of services. Just a fifth acknowledge 5G will enable new types of devices.
“While smartphones remain the dominant consumer technology, device vendors and operators are looking to 5G to unlock a new chapter in the smartphone growth story – even though our research suggests there is still work to do to convince consumers of the benefits of the move to 5G.”
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