Our love affair with smartphones is waning

Angus Kidman 9 June 2016

UmbrellaPhone_Shutterstock

But 1.5 billion of them will be sold across the world this year.

We're still buying smart phones in massive quantities, but growth in the market is slowing.

According to Gartner, a total of 1.5 billion phones will sell around this year, which is up 7% on last year. While most industries would be reasonably happy with 7% growth, in the smartphone market that represents a decline. In 2015, sales grew by 14.4%. Peak growth was way back in 2010, when sales went up by a massive 73% compared to 2009. (2010 was the year the iPhone 4 debuted.)

So what's going on? The usual answer is that smartphones are now so capable that it's becoming harder to come up with a good reason to upgrade. Provided you don't smash the screen, the incentive to update every 12 months, or even every 24 months, simply isn't there. Gartner estimates that 90% of people in "mature" markets now have a smartphone, and that the average replacement cycle has expanded out to 2.5 years. There's a similar trend evident in the tablet space; sales in Australia in 2015 were down 34% on the previous year.

Phones haven't hit that point of actual decline, and Gartner is still predicting that the market will continue to expand, with 1.9 billion phones selling in 2020. One reason for that? It's also cheaper than ever to buy a smartphone, particularly if you're happy with Android rather than iOS.

Growth in cheap Android phones is particularly evident in emerging markets such as India, but it's also the most active area in Australia. In the first quarter of 2016, 53% of new phone sales were Android devices.

It would be rash to predict that there are no further advancements to be made with smartphones. Battery life still bites on many devices, and screens that don't smash whenever you drop the phone would be welcome. But until that happens, it seems like growth will continue to plateau.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.

Picture: Shutterstock

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