Why Are Smartphone Sales Declining?

The smartphone era has led to an explosion of innovation, from more gimmicky things like fingerprint scanners to the uncanny ability to fit an incredible amount of computing power in a tiny space that’s occupied mostly by a screen and a battery. The amount of “new” seems to be running out, however, as manufacturers in 2018 are having trouble attracting new buyers. Although the reasons behind it are not in the data, one could draw a clear conclusion as to why fewer people are buying smartphones than they did last year.

The Data


Gartner published an analysis for the final quarter of 2017, the time of the year when people go on enough holiday shopping frenzies to empty stocks everywhere. Compared to 2016’s final quarter, the following year saw a decline of 5.6 percent. This is the first-ever decline in sales recorded by Gartner in the smartphone industry.

This may not seem like much, but when you’re expecting hundreds of millions of sales, the losses could amount to tens of millions of dollars.

At the consumer level, however, not a lot would change. Companies would simply reduce the number of smartphones they manufacture if demand falls.

Why This Is Important


Although we don’t really know what caused the decline in sales, we can safely boil it down to two different trends. By no means could we ascribe this dip to a lack of interest in smartphones, as they have become incredibly ubiquitous in modern society.

However, PCs are also ubiquitous. And even so, their sales figures are not nearly at the levels they were in the late 90s and early 2000s. At some point disruptive technologies will plateau, not in popularity but in purchases.

According to Gartner, two things are happening:

  1. Fewer people are upgrading from “dumb” phones to smartphones due to a lack of high-quality ultra-cheap smartphones.
  2. People who own smartphones are already choosing to take better care of them and making smarter purchases of phones that would not succumb as easily to obsolescence.

Consumer choices for the most part in the first half of the 2010s involved a preference for new, shiny features. But consumer decisions don’t happen in a vacuum. They evolve over time.

As people grew more immune to the noise that flagship manufacturers were making about the flashiness of their new phones, they began making savvier choices. Some of these people will stop buying a new phone every one or two years just to have the latest gear.

This happens as soon as smartphones are viewed less as status symbols and more as tools.

Although this event marked a slight drop in sales, we could expect the growth to plateau at some point in time when interest in having the most cutting-edge technology drops.

On the other hand, this would also lead application developers to think more about how to make their apps more resource-friendly just like they started doing as people stopped buying brand new PCs all the time.

What have your mobile phone purchases looked like recently? Do you buy more for durability or for new features? Tell us all about it in a comment!

Miguel Leiva-Gomez
Miguel Leiva-Gomez

Miguel has been a business growth and technology expert for more than a decade and has written software for even longer. From his little castle in Romania, he presents cold and analytical perspectives to things that affect the tech world.

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