The Smartphone Sales Slowdown is Real (axios.com)

Earnings reports from Samsung and Qualcomm on Wednesday suggest a serious industrywide slowdown in smartphone sales. Samsung's report is especially telling, since it also makes displays and other components for Apple. From a report: The smartphone business is an incredibly crowded space, so a slowdown could lead to even steeper price competition. That's a potential short-term boon for consumers, but could put the hurt on a whole host of technology companies. Samsung's take: Its written outlook was terse and brief, but damning. Of its own phones, it said "[p]rofitability in the mobile business is expected to decline quarter-over-quarter due to stagnant sales of flagship models amid weak demand and an increase in marketing expenses to address the situation." Similarly, it cautioned of weak demand in its display and chip businesses, which supply components for both Samsung and its phone rivals, including Apple. Qualcomm's take: The phone chip giant also predicted a slowdown, cutting its forecast for 3G and 4G smartphones.

Comments

Unsurprising

[Anonymous Coward]

When my old phone (Samsung S4 note) does everything I need it to do, is quick enough and I managed to buy a replacement battery recently.

I do not need a new phone, along with its misfeatures, learning curve, and expense.

Re:Unsurprising

[cayenne8]

Well, at some point, everyone has one...that goes with anything you sell.

Not everyone buys a car each year....not everyone buys a TV every year....

Re:Unsurprising

[jbmartin6]

This is just a normal phase in the lifecycle of any product. Eventually the product is good enough for the standard uses and there is no real gain in buying a new one when you don't have to. Same thing already happened to PCs. Until someone figures out a whole new use for them, sales will lag. Good managers should have a plan in place for this predictable phase.

Re:Unsurprising

[DontBeAMoran]

$1000 smartphone that lasts two years = $41.67 per month + expensive monthly fees for service, usually over $50. The total for ten years, if replacing the phone every two years, is $11K.

$100 flip phone that lasts ten years = $0.83 per month + extremely low monthly fees for service, usually around $15. The total for ten years is $1.9K.

That's $9.1K in your pockets, which around here is an extremely nice used car only less than five years old with enough money for any repairs that need to be done.

Re: Unsurprising

[Stormwatch]

That's amazing, I've got the same combination on my luggage!

Re:Unsurprising

[Stormwatch]

You don't have to spend $1000 unless you want the latest and greatest. You could buy an used one, or a more modest model.

Re:Unsurprising

[ctilsie242]

Same with my old iPhone 6s. There are few things it doesn't do that the 8 or X does, other than animoji, and that isn't really a deal breaker for me.

What phone makers don't realize is that they just hit where PC makers have been for the past decade: Phones are good enough that models from a few years back do the same function as flagship phones, so other than having a shiny new thing, it isn't really a thing to upgrade. Plus, people are finding that a midrange phone does what they need, even though it may not have the curved screen, or the latest bells and whistles.

Re: Unsurprising

[cyber-vandal]

My 6s does what I need it to do and having a headphone jack is more convenient than not having one.

Keep raising those prices!

[Anonymous Coward]

I'm sure reaching/surpassing the $1000 mark for flagships has nothing to do with the decline in demand whatsoever! Keep making them more expensive while only adding minor new features and little performance.

In other news

[shmlco]

And in other news: "China's smartphone market suffered its worst decline ever in the March quarter--an 8 percent YoY drop in unit sales--but Apple still managed to achieve 32 percent growth, directly attributed to "strong performance of its iPhone X.""

Also, what Samsung actually reported in its display panel earnings statement for the March quarter was that "OLED Earnings declined due to weak demand AND [note] rising competition between Rigid OLED and LTPS LCD."

Like post core2 duo pc's

[OffTheLip]

Not that much has really changed regarding performance for the average PC user. It's good enough so why upgrade. Phones are now experiencing the same thing. Plus they are very expensive.

Re:Like post core2 duo pc's

[squiggleslash]

To some extent, yeah. But mobile phones have a lot of planned obsolescence built into them, from difficult to replace batteries (even if the phone allows you to do that, you need to know where to look and there's a lot of FUD about third party batteries that puts people off buying them), to internal storage limits that are ludicrously small.

I think a better reason for the slow down is that phones are actually declining in quality while increasing in price. If the phone aimed at your needs and wants doesn't have critical features like a headphone jack, and most reports suggest a worse battery life than the one you have, then aren't you going to want to hold on to the one you have for longer?

If mobile phone makers would learn to diversify their product range just a little, rather than closing Samsung who in turn is cloning Apple, then I'd expect an explosion in sales.

Why should this be surprising?

[IGnatius T Foobar]

No one should be surprised. We saw this happen with computers and now we're seeing it happen with smartphones. The market is saturated, the existing installed base is more than capable of handling most workloads, and therefore fewer people are motivated to upgrade every year. You want us to buy new phones? Build them with longer battery life and less crapware/spyware. The screens are already good enough. The cameras are already good enough. The operating systems are already good enough. Gee-whiz bells and whistles aren't going to motivate us to upgrade anymore. And stop building phones with notches.

Re:Why should this be surprising?

[datavirtue]

People are also tired of the carrier/OEM relationship. It results in severely inflated carrier charges (2X) while stretching the phone costs over several years.

You can get an unlocked phone and use a T-Mobile reseller for less than half the price of the carrier/OEM lock-in model. The problem is that there are very few good unlocked phones and they are very difficult to research. It is a major barrier. I found the Huwaei phones which are great but you won't be able to get those in the US soon. These phones made it very simple. They are feature/spec parity with the flagship phones and are built very well. They work internationally and in the US.

No surprise they got banned. The two major carriers are very powerful in Washington DC.

Re:There's not a lot of reason to upgrade a 'Droid

[Anonymous Coward]

Yeah, there's not a lot of difference between a $150 phone and a $700 phone once the GPU is removed from the equation.

And now the cell phone promoters have learned that the replenishment rate of a product drops once it becomes "good enough", just like PCs.

Re:They'll be prying my Samsung Galaxy S4...

[Bender1001]

Replaceable batteries...miss those. Have a Galaxy S6 that works perfectly fine but needs a new battery soon which is gonna be a pain to replace.

Good news, Samsung!

[nightfire-unique]

I've got two thousand dollars with your name on it.

All you need to do is make an actual flagship phone with a replaceable battery. I, and many others, will not purchase a device into which consumables have been glued.

Re:What can you speak?

[DontBeAMoran]

Wall street [...] is insane.

FTFY

Memory prices.

[MrL0G1C]

Good, now maybe memory prices can come down a bit.

FEATURES!

[sdinfoserv]

There's no new MUST HAVE features on the new model phones. Thus no impetus to spend money on them. Once 5G starts widely rolling out, there may be surge again, but my guess is the carriers will charge / throttle 5G nearly out of existence so that may not be all that cool either.

Re:FEATURES!

[DRJlaw]

Once 5G starts widely rolling out, there may be surge again, but my guess is the carriers will charge / throttle 5G nearly out of existence so that may not be all that cool either.

No, there won't. 5G essentially requires near-line-of-sight. In a world (meaning the US) where companies won't even invest in consumer fiber deployment any longer, the idea of high density 5G cells providing NLOS connectivity is laughable. A 5G cell phone will have minimal advantages over an LTE cell phone with WiFi connectivity at the home and office (which also offers the advantage of not burning through the pitiful cell data allotment).

Smartphones are dying

[WaffleMonster]

Downturn in sales confirms smartphones are dying. In the future there will be no smartphones. Those of you who still have smartphones are dinosaurs stuck in the past.

Re:There's not a lot of reason to upgrade a 'Droid

[msauve]

The flagships are all pushing thinner phones with minimal bezels. F that. It's hard enough to handle a phone already without fat-fingering an edge and triggering some unwanted change.

I want a thicker, easier to handle phone, and take the room to put the headphone jack back in, along with a larger removable battery and sdcard. Bonus if you have front facing stereo speakers in the bezels (with no display notch).

Re:They'll be prying my Samsung Galaxy S4...

[stevegee58]

Absolutely. Here's another example:
My old Fitbit One is going to need a new battery soon but it's literally glued shut and can't be opened without breaking it. (Luckily my company bought it for me.) The new low-end replacement Fitbit has a replaceable battery so clearly somebody is listening. If the battery weren't replaceable I wouldn't even think about buying another Fitbit.

Re:There's not a lot of reason to upgrade a 'Droid

[thegarbz]

Err no there's zero stress on the charging port for most battery cases. Also WTF you doing that is making your connectors fail. It's a phone not a cricket bat.