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Smartphone Demand Hits A Peak: What's Next For The Technology?

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Smartphone Demand Hits A Peak: What's Next For The Technology?
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Most Americans are unable to picture life without a smartphone. But has growth in the sector stagnated, even as smartphones pack more computing power and features in pocket-size devices than ever before? 

Falling Sales 

An alarm signal flashed for many when IDC released its 2017 estimates for worldwide smartphone shipments, which came in at 1.472 billion units, down 1 percent from the 1.473 billion units shipped in 2016. More worrisome is the data for the fourth quarter of 2017, which shows shipments falling 6.3 percent year-over-year to 430.7 million units.

Infographic: Have We Reached Peak Smartphone? | Statista

Source: Statista

"Developed markets such as China and the United States both witnessed a decline during the quarter as consumers appeared to be in no rush to upgrade to the newest generation of higher-priced flagship devices," the IDC release said.

Penetration reached the saturation level in many regions and technological advances became rarer and less obvious to the average user, according to Statista

Analyzing the reasons behind poor smartphones numbers in 2017, IDC said consumers started perceiving the ultra-high-end flagships as more of a luxury than a necessity, with higher price points acting as a deterrent. This fact took some of the luster off innovations such as new full-screen displays, advanced biometrics and improved artificial intelligence.

Apple Inc. (NASDAQ: AAPL)'s newest iPhone X hasn't had the best reception so far, with reports raising concerns about demand for the product. 

See also: Here's Why Apple Is Drexel's Top IT Pick For 2018

Broad demand indicators for the iPhone X suggest a mature market that offers little opportunity for sustained upside to high-end iPhone units, KeyBanc Capital Markets analyst Andy Hargreaves said in a December note.

Apple remains the market leader in smartphone shipments globally, with a 19.2-percent share compared to SAMSUNG ELECTRONIC (OTC: SSNLF)'s 18.4 percent.

An Old Order Gives Way To The New

Smartphones as we know them today may become obsolete in five years, CNBC reported, quoting an Ericsson global survey released at the end of 2015. In the future, the emphasis would be on software that makes the devices smarter and more personal.

Digital assistants such as Apple's Siri, Amazon.com, Inc. (NASDAQ: AMZN)'s Alexa and Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG)'s Google Assistant will have a big role to play in the transitioning of smartphone technology, the CNBC report said.

Augmented reality could eventually replace smartphones, TV and related products, according to Business Insider, which cited a statement by Microsoft Corporation (NASDAQ: MSFT)'s Alex Kipman. This would allow users to do away with a separate device, with everything from calls and chats to movies and games beamed into users' eyes and overlaid on the world around them.

Smartphone technology could eventually morph into an even more efficient platform, just as it evolved from PCs and laptops.

Related Link:

Samsung Introduced 10 Times The Number Of Models In 2016 Than Apple; Did It Translate To Market Share?

Photo courtesy of Apple. 

Posted-In: Ericsson IDC StatistaTech Media Trading Ideas Best of Benzinga

 

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