How Is the Smartphone Market Changing?

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    5 Mobile Development Trends for 2016

    When people disagree, it could be that they are seeing different data, come to the discussion from different perspectives or have different agendas. For a few years, the common wisdom has been that the smartphone sector was transitioning. The idea is that the high end is saturated and, since all the exciting features have been introduced, people tend to keep their devices longer. Hence, sales will suffer.

    Meanwhile, the emergence of ever less expensive devices is driving growth at the lower end. This growth will be centered on developing economies. There, not only do target groups have less money, but the wired infrastructure is poor or nonexistent. This further encourages growth of smartphones for the masses.

    A couple of pieces of evidence have emerged that run counter to that scenario, though, at least partially. Bloomberg reports that Samsung’s top models are doing well:

    It’s true that an early release for the latest version of its flagship handset helped Samsung clock up stronger sales in the first quarter. But a tripling in first-month shipments for the Galaxy S7 compared with the S6 a year earlier probably reflects renewed demand for premium devices that stand out from an increasingly noisy and crowded catalog of mid- and low-tier smartphones.

    The story points to strong sales for high-end devices from Huawei, Apple and ZTE.

    The Times of India offers another small indicator that the top of the smartphone market is not as beleaguered as many people thought. It quotes percentages from CyberMedia Research, which said 5 million premium handsets will be sold this year. If that turns out to be true, high-end sales will outpace last year’s sales by about 1.7 million phones. The percentage of the entire market could range from about the same as last year (3.4 or 3.5 percent) to 5 percent, which would be an increase of about 1.5 percent.

    The results in India are particularly important since it is one of the biggest consumers of low-end phones. The three top premium brands are Samsung, Apple and Sony Mobile.

    While not completely contradicting Bloomberg or CyberMedia, BI Intelligence has released a report on smartphone growth that seems to miss, or just not agree with, the idea that premium phones are doing better than expected. The site does validate two points the other organizations made: The price of high-end phones is shrinking and developing economies are increasingly the focus of the industry. While the piece suggests that the “mature markets are increasingly approaching saturation,” it does not point to the high-end device growth seen by Bloomberg or CyberMedia.

    There is little doubt that smartphone buying patterns are changing and that developing economies represent a huge and growing market. What seems to be less certain than before, however, is the health of the top end of the market. This is a big deal because building for and distributing to these two universes of people are very different. Manufacturers, distributors and the rest of the supply chain need to react. And, to react, they need a clear idea of what is going on.

    Carl Weinschenk covers telecom for IT Business Edge. He writes about wireless technology, disaster recovery/business continuity, cellular services, the Internet of Things, machine-to-machine communications and other emerging technologies and platforms. He also covers net neutrality and related regulatory issues. Weinschenk has written about the phone companies, cable operators and related companies for decades and is senior editor of Broadband Technology Report. He can be reached at [email protected] and via twitter at @DailyMusicBrk.


    Carl Weinschenk
    Carl Weinschenk Carl Weinschenk Carl Weinschenk is a long-time IT and telecom journalist. His coverage areas include the IoT, artificial intelligence, artificial intelligence, drones, 3D printing LTE and 5G, SDN, NFV, net neutrality, municipal broadband, unified communications and business continuity/disaster recovery. Weinschenk has written about wireless and phone companies, cable operators and their vendor ecosystems. He also has written about alternative energy and runs a website, The Daily Music Break, as a hobby.

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