We're No Longer in Smartphone Plateau. We're in the Smartphone Decline. (nymag.com)

The days of double-digit smartphone growth are over -- and the next decade may start to see smartphone sales decline. A report adds: 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, the type that would inspire a Scorsese montage: 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. (To nail the Scorsese effect, imagine "Jumpin' Jack Flash" playing while you think about it.)

But just like every Scorsese movie, the party ends. Smartphone growth began to slow starting in 2013 or 2014. In 2016, it was suddenly in the single digits, and in 2017 global smartphone shipments, for the first time, actually declined -- fewer smartphones were sold than in 2017 than in 2016. Every smartphone manufacturer is now facing a world where, at best, they can hope for single-digit growth in smartphone sales -- and many seem to be preparing for a world where they face declines.

Comments

Wafer

[fluffernutter]

Obviously smartphones aren't being made thin enough. They need to make them as fragile as a wafer, then they can sell more.

Prices too damn high

[Anonymous Coward]

Everyone I know "wants" a new phone, but they don't want to pay a grand.

Re:Prices too damn high

[torkus]

Price creep the last few years has been out of hand while the actual feature changes have slowed to a crawl or even gone backwards (looking for you headphones jack). Especially with "certain" greedy manufacturers who were recently charging $100 for 16 or 32GB of flash. Even now, $150 to go from 64 to 256 is a ripoff.

People simply don't need the new phones because there's nothing to differentiate them. It's not even sexy or shiny when you can't tell the difference...especially when you're force to stuff them in a case that doubles the size.

I'm still waiting for someone to take the chance on a thicker phone with a real battery. Apple did actually go a bit thicker on some of their latest phones but i don't think they actually added significant battery capacity.

Re:Prices too damn high

[ShanghaiBill]

Everyone I know "wants" a new phone, but they don't want to pay a grand.

You have it backwards. People DON'T want new phones. Their existing phones are "good enough", so they are waiting longer and longer between upgrades.

Since upgrade cycles are longer, the phone makers can only maintain revenues by pushing up the price of new phones, and adding silly features to justify the higher price. So far this strategy is working, with record revenues even in the face of falling unit sales.

I have a 4 year old iPhone 6. It works fine. I have no plans to replace it.

Re: Prices too damn high

[Joce640k]

It's a medical fact that buying a new Apple product produces a huge blast of Seratonin for a while.

With each purchase it lasts less, however, so you need to buy more often.

(or at least buy a lot of accessories over the next few weeks, eg. airpods, to maintain the high)

Re:Prices too damn high

[edi_guy]

I'm also in agreement. I'm keeping my 5SE as long as possible. Have already had to 'iFixit" several bits of trim and charger connector. In addition to the ridiculous cost of a new phone, I also cannot stand how big they have become. Doesn't anyone remember Will Farrell and the tiny phones...?

Re:Prices too damn high

[thegarbz]

Apple did actually go a bit thicker on some of their latest phones

Get with the times, the thinnest phones came out in 2015. Pretty much every manufacturer has been producing thicker phones for the past 3 generations (not just the latest one, Apple's thinnest phone was the iPhone 6).

Re:Prices too damn high

[OneHundredAndTen]

I went from an SE, to an XS Max, and it was worth it for the massive screen size increase,

Unless you are built like your average NBA player, when putting it to your ear you will look like a complete dork. But then again, who uses a smartphone for phone calls?

Re:Prices too damn high

[Dixie_Flatline]

The XR has the best battery life of any iPhone, and apparently some of the best battery life of any phone of this current generation. It comes in about even with the Note 9.

Apple makes approximately the same margins on their phones now as they ever have. Consider that the iPhone 3Gs was released in 2009 for $599. In today's money, that's a bit over $700, so just shy of the $750 that the XR costs.

Retail prices have crept up—and we can argue over whether Apple's prices should've crept up, given that many of the components must have come down in price over time, though they also always try to have some new stuff in there every year as well—but they haven't actually increased all that much. We tend to forget about inflation, but it affects tech companies too.

https://www.theinformation.com...

But maybe the real question here is whether we feel that we're getting the same value for money that we once did. The iPhone 4 felt like the future. The phones of today simply feel like what we've always had. Is the problem the phones or our expectations?

Re:Prices too damn high

[goose-incarnated]

I'm also in agreement. I'm keeping my 5SE as long as possible. Have already had to 'iFixit" several bits of trim and charger connector. In addition to the ridiculous cost of a new phone, I also cannot stand how big they have become. Doesn't anyone remember Will Farrell and the tiny phones...?

You're thinking Ben Stiller, Zoolander.

Re: Prices too damn high

[Enigma2175]

I recently got a new iPhone and unless Seratonin is the "angry neurotransmitter" I didn't get any blasts of it. There are many things that don't work as expected or are an annoyance, like constant "reminders" to set up Apple Wallet but the missing headphone jack is the source of most of the ire. It didn't even come with a headphone adapter so I had to buy one , which doesn't work. There's not a technical reason for it failing, it works fine for 1:45 then stops working with an "Unsupported accessory" message. It's just Apple trying to squeeze a few more dollars out of me, forcing me to buy THEIR overpriced accessories (which should be included with the phone in the first place). In my case it is counterproductive because instead of thousands of dollars in future phone purchases Apple will never get another dollar from me because of the horrible experience. Heck, look at the reviews for the basic headphone adapter from the Apple store, most of the reviews are one star:

This is my 7th one I’m one. As some one that loves wired headphones because I hate charging them this dongle is the worst !

I'm on my third lightning adapter since April. They don't last more than 2-3 months and are very cheaply made.

And these are the reviews from the Apple fanbois. It doesn't seem like they are feeling Seratonin blasts either.

Re:Prices too damn high

[Hallux-F-Sinister]

I disagree. There ARE things to distinguish them.
The iPhone SE: my last one was under $400, has 128GB of storage, and... a... HEADPHONE... JACK.

Your much newer phone: cost 2 or 3 times as much, didn’t have any more memory, (even if you have 256GB, or 512GB... WTF are you doing to justify paying for it? What are you doing, recording 4K video at 120fps of a bird taking a shit on your car? Oh, and as you pointed out... where’s the headphone jack? On their competitor’s phone, that’s where it is.

We have the power to bring back the jack. How? Don’t buy another product without one.

#bringbackthejack

Everyone is making it more complicated than it is

[KixWooder]

The market is saturated. Phones are good enough and not enough people care about a new camera to justify buying a new one. Smartphones, from any manufacturer, are not status symbols anymore.

Why do we need article after article to tell us the obvious?

Thousand Bucks?

[CohibaVancouver]

I also think we've reached a point where a thousand bucks is more than people want to spend on their "cell phone," regardless of how cool it is. My Samsung Galaxy S5 is long in the tooth, so I just replaced it - With an S7 that cost me $225 CAD.

I don't think I'm alone.

Re:Thousand Bucks?

[lgw]

I also think we've reached a point where a thousand bucks is more than people want to spend on their "cell phone," regardless of how cool it is.

I bought a fairly expensive LG (hey, it had a headphone jack, premium luxury feature right there). For all the touted processing power, the key build-in apps are very slow. You'd think that if they're selling a high-end phone, the actual phone dialing app could launch in under 5 seconds!

Maybe I'm an outlier, using a phone to actually make phone calls, but there really doesn't seem to be much of a difference anymore between the $300 phone and the $900.

Still waiting for a another legitimate flagship

[nightfire-unique]

I'm still waiting for a legitimate flagship phone to replace my Note 3.

Every phone released after it has been worse, by some measure:

- Missing key sensors (ie. thermometer, which is super useful while winter camping)
- Missing the headphone/mic jack
- Missing physical home and back/task switch buttons
- Having locked bootloaders that are difficult to deal with
- Having poor support for LineageOS/AOSP
- Being constructed of metal/glass that breaks/bends easily compared to plastic, along with bizarre screen curvatures
- Having wear components, such as batteries, glued in and non-replaceable, limiting the lifespan to ~18 months

I have literally thousands of US dollars to spend on a new phone, and can't wait for the day something is released which rivals the Note 3.

Re:Still waiting for a another legitimate flagship

[Anonymous Coward]

I'd put this under

- super useful while winter camping

Re:Still waiting for a another legitimate flagship

[Anonymous Coward]

As for temp sensor, i dont think the note4 has one aside from the sensor for the SOC temp. I can't see an ambient temp sensor being all that accurate seeing as the phone is generally carried in a pocket or cause of the heat generated internally by the phone while in use. a $5 digital thermometer you could hang on your bag would probably provide far superior results.

Re:Still waiting for a another legitimate flagship

[nightfire-unique]

I've used it a lot, and it's actually surprisingly accurate as long as you keep it in the ambient air you want to measure (ie. not on your person), and make sure to give it ~5-10 minutes to cool down after being under load.

I leave it recording the temperature in the background whenever I'm out winter-camping more than a few days. You get little spikes when you put it under a very heavy load, but otherwise it's accurate from about +30 to -30C +/- 2C. It's fantastic to know how cold it gets overnight, so you can optimize your sleep system. I also set a temperature alarm overnight to wake me up if the temperatures drop below a certain point to help avoid hypothermia; if I'm expecting -10C, and it hits, for example, -18C, it might be time for another liner, etc.

First it happened with PCs.

[doubledown00]

Now with smart phones. This leaves manufacturers with two options: 1) Open new markets, or 2) Actually innovate. Unless a whole bunch of new tribes are discovered, the former ain't happening. Which means we all hold our breath and wait for #2.

Until that happens we should all prepare ourselves for wave after wave of dull non-innovative over-priced dreck.

Re:First it happened with PCs.

[torkus]

They could try listening to customers that don't need an extra CPU to support some esoteric AI function but instead want a larger and/or removable battery, the return of their headphones jack, a phone that doesn't shatter in 5 seconds if you don't have a case, and (for some) USB-C connectivity.

The minor incremental improvements to the camera are no longer worth buying a $1000 device. The cutesy changes to face-ID and in-screen fingerprint reading are...cutesy.

"Smart"-phones is wrong.

[Quakeulf]

They call them smartphones but they behave like dumbphones, making the user and everyone else involved dumber. They are designed to keep you dumb. The novelty of the name "smartphone" has worn off a long time ago.

Re:Everyone is making it more complicated than it

[doubledown00]

Phones are good enough and not enough people care about a new camera to justify buying a new one. Smartphones, from any manufacturer, are not status symbols anymore.

Tell that to my wife. She salivates every time the Pixel 3 commercials come on. To hear her tell it a wider selfie camera is the only thing standing between us and a life of complete fulfillment.

Re:Everyone is making it more complicated than it

[The Grim Reefer]

Tell that to my wife. She salivates every time the Pixel 3 commercials come on. To hear her tell it a wider selfie camera is the only thing standing between us and a life of complete fulfillment.

I'm not sure if I should be jealous of you or feel sorry for you.

Wait a minute

[93 Escort Wagon]

I know Penny Marshall wasn't the most attractive woman in the world - but I don't know how someone would confuse her with Martin Scorsese.

replacement is down. Total users will still go up.

[bill.pev]

The number of people who own smartphones will increase, but if they don't replace them every 6 months when a vastly better one comes out, along with killer apps that need the new capabilities, then people will hang onto them for longer. This is better for the environment, and for consumers.

So we'd expect annual sales to drop once the market is saturated (by definition) ... Unless they are built to last only 6 to 12 months. And they aren't repairable.

Re: Everyone is making it more complicated than it

[JoshYagley]

Another issue is that there is no obvious software limited by hardware in the cell phone market. Maybe in the future AR will help to drive hardware technology. But so long as AR development is relegated to isolated applications no one will care.

Depends on how you measure plateau

[Oswald McWeany]

If we're talking new sales of phones, yes we've reached a plateau. If we're talking about % of world population that use a cell phone... no, we haven't reached a plateau and won't for a long time.

The main difference is, phone sellers raised their prices so much that people want to hold onto their phones longer. When a new phone costs $200 you don't mind replacing it in a few years. When a new phone costs $1000 you would be peeved if you were forced to replace it in two years.

Re:Depends on how you measure plateau

[RuiFRibeiro]

You can always choose to buy a 200-400 phone from the likes of Xiaomi that have only a small profit margin. Better than buying something built for a 1000% profit as Samsung or Apple.

The technology as evolved significantly both in computing power and software design for a cheaper phone to be more than enough for almost anyone.

Re:Depends on how you measure plateau

[coastwalker]

My first smart phone last Christmas cost me $15, its fantastic! This is one market where you could tell that early adopters were going to pay for my great experience if I waited long enough. Posted from my second hand Xeon workstation.

Re:Depends on how you measure plateau

[Kjella]

If we're talking new sales of phones, yes we've reached a plateau. If we're talking about % of world population that use a cell phone... no, we haven't reached a plateau and won't for a long time.

That will probably look more like an S-curve but we're already far past the inflection point. Time per billion unique mobile users according to this:

1st billion: 13+ years (they lack early history)
2nd billion: 4 years
3rd billion: 3 years
4th billion: 3.5 years
5th billion: 4 years

That's 5 billion of a world population of 7.6 including little kids - even in sub-Saharan Africa 70% of the population age 16+ have a cell phone. There's really just three poorly connected countries left in the world: Cuba, North Korea and Ethiopia. We're filling out gaps with the young, old and the gender equality, but the vast majority has a cell phone in the family.

Re:Need more apps

[Joce640k]

Nope. What we need is more peop^Wcustomers.

If we can manage to double the population over the next five years then the smartphone manufacturers should see a return to previous growth figures.

Galaxy Note 4 Better than Galaxy Note 8

[BrendaEM]

Of course, I've owned both. The curved screens make no sense in the real world.

Time to cannibalize the PC market

[HeckRuler]

If they make a decent interface from a phone to a real monitor, (and they get their butts out of their heads when it comes to bluetooth support for mouse and keyboard) then most people's use-case for owning anything other than a phone really diminishes.

I don't know if it has to be wired. Mirroring the screen via chromecast didn't work so well for me, but maybe they could get it working. There's a few niche products out there that have a dock, but they didn't catch on.

I could see a world where we all just walk around with our main computer on our body all the time. Instead of a work computer or a rig at home. A workstation would just be a chair, monitor, keyboard/mouse, wifi, and some place to plug in. And of course a bitchin' VR supporting super-computer next to a cybernetic psychic dolphin.

Re:Everyone is making it more complicated than it

[Known Nutter]

Anyone that shallow is probably hot...

Limiting factor

[Shotgun]

For every computer that must interact with humans, there is a limiting factor....the human.

This happened to desktops. They got so fast that the biggest slice of CPU time went to waiting on me, the memory was big enough to hold anything I could conceivably ever want to work with, and I couldn't take enough pictures to fill the hard drive.

So people moved to laptops, because they were becoming just as powerful but portable. Then they became just as powerful, and the point of buying a new one went away.

So people moved to phones, which were more portable. I can't think of any app I have that doesn't spend more time waiting on me than I does processing. There is no point of adding more megapixels to camera, and it stores more pictures than I can be bothered to cycle through. Other than a broken phone (and, I bought a Kyocera this time to avoid that scenario) what is the point of spending $1k on another one that will just spend MORE time waiting on me?

There is little competition...

[RyanRife8866]

You basically can get an iPhone or an Android (which now have little to differentiate themselves)....it's time for something new! Bring back Blackberry OS or Windows Mobile.

Re:Clearly it's a marketing problem

[Holi]

No, for that you need micropixels.

But it happened faster than for computers

[shanen]

If I ever got a mod point, then I'd give you [KixWooder] an insightful mod for that comment rather than a mere interesting. Hypothetical since I never get mod points. Or maybe not even relevant, since I do want to comment and I think that would cancel my hypothetical mod point...

The most significant aspect is that we reached saturation much faster this time compared to computers, (but also relative to any other technology I can think of). The capabilities of the smartphones are beyond what most people can actually use, and even though the capabilities are increasing (and the prices are decreasing), there's no reason to buy a new one. The available new customers are just late adopters yielding ever lower profit margins (as the prices continue to fall).

Converting it to anecdote form (as a data point), what I am doing with my latest smartphone is only slightly better than what I was doing three smartphones ago. Actually, there was one major feature of my old PDA that I still haven't ported to the smartphone era, but mostly I've been looking for new things I actually want to do and not finding much. (Voice dictation is the main one, but it would run on the old phones, too.) The main reason I got a new smartphone this year was because it was free, but if prices keep falling, they may have to pay me to go through the hassle up the next "upgrade".

(Perhaps my perception of the lack of new and desirable features is just because I've mostly stopped playing time-wasting games? Most of the "new" games are just flashier versions of ancient classics. Interesting coincidence that I'm almost finished reading Fire in the Valley right now, and it mentions many of the old games (and brings back the memories). I don't play them now, but I'm confident I would still enjoy them. I just feel I have better uses for my time and absolutely no need for more and newer ways to waste time. (Well, except for that literacy development game no one has developed yet...))

Pay me to upgrade my smartphone? Well that's also how I'm feeling about the latest pains of Windows 10. Come to think of it, I didn't pay any money for those upgrades to Windows 10 and I have no desire to ever again pay Microsoft for anything... (Just my allergy to corporate cancers typing?)

Re:Everyone is making it more complicated than it

[rogoshen1]

easy there mr. white knight, you might scuff that armor. Anyone who sees the ability to take wide angle selfies (not photos mind you, but selfies) as *THE* key feature is probably a bit on the shallow side.

Virtue signaling? reddit's that-o-way bub,

Re:Who is force you?

[torkus]

When they build a phone with large sheets of glass on both sides, the majority of people need a case to avoid breaking it. Your anecdotal experience and obnoxious judgmental comment is not the norm. Nor is the idea that cases don't offer protection - maybe some don't but the large majority offer at least some protection.