Mixed blessings in smartphone market as sales rise but replacement cycles lengthen

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The latest market share data from Gartner shows strong year-on-year growth for the top five global smartphone manufacturers, indicating consolidation in the phone market.

According to the Gartner figures, Samsung shipped 73.6 million units in the first quarter of 2021, giving it a 20.3% market share; Apple shipped 58.5 million units, giving it a 15.5% market share; and Xiaomi was the third most popular smartphone company, shipping 48.9 million units to give it a 12.9% market share.

Gartner reported that the launch of mid-priced smartphones – those priced under $150 – boosted the leading supplier’s unit sales globally, with the early shipping of Samsung’s flagship 5G smartphones added to the company’s smartphone sales growth, said Gartner.

Meanwhile, Apple benefited from the launch of its first 5G-enabled iPhone. Anshul Gupta, senior research director at Gartner, said: “5G will continue to be the major growth driver for Apple in 2021. Device upgrades will fuel demand for Apple’s flagship phone throughout the year.” 

Sales figures from the major smartphone manufacturers demonstrate two trends – the first is Apple’s success at convincing people to buy more expensive devices, and the second is that manufacturers of Android-based devices will struggle to compete on features in the future.

According to Juniper Research’s Smartphone market: Device innovation, regional analysis & market share forecasts 2021-2026, although smartphone purchase cycles are lengthening, Apple has managed to consistently convince users to purchase higher-priced models through curation of a strong hardware and software ecosystem, which other smartphone makers have only limited opportunities to do in the current market.

Juniper Research also predicted that manufacturers which focus on a particular segment and invest in premium features, such as high-end audio and advances in camera technology, were unlikely to appeal widely enough to compete at scale in the smartphone market.

Feature diversification alone is not enough for lasting success in the crowded smartphone market,” said Juniper’s research co-author, Nick Hunt. “Apple and Samsung have succeeded in fostering brand loyalty, which smaller vendors have struggled with, despite many introducing new capabilities. These players need to pair strong features with strong branding to have sustained success.”

According to Juniper Research, a lack of design innovation is leading to lengthened replacement cycles, due to reduced consumer desire to upgrade from a recent phone to the latest model.

While foldable devices have the potential for mass appeal, Juniper Research suggested that their high cost put them at the premium end of the market, limiting wide-scale adoption.

Juniper Research also identified the growth of SIM-only contracts as another factor stifling growth in the smartphone market.

“As purchasing cycles have slowed, and recent innovations have failed to spark the market back into the growth seen in the mid-2010s, it is likely that the smartphone market will not see meaningful growth until another significant upgrade becomes available to the majority of consumers, not just those at the higher price points,” said the Juniper report.


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