Why Global Smartphone Sales Are About To Decline For the First Time Ever

Buffeted by higher prices and a lack of new buyers, the global smartphone market will contract in 2018 for the first time ever, according to Counterpoint Research.

After growing annually by an average of 16% from 2012 through 2017, shipments of smartphones will decline about 1% this year, the market research firm forecast, to total about 1.5 billion.

Many factors are contributing to the slowdown, starting with general market saturation of mobile computing devices. A slowing global economy, with rising trade tariffs, also hit demand. And a final key factor may be the rising price of phones, like Apple’s $1,000 iPhone XS, that are prompting owners to wait longer between upgrades, Counterpoint said.

“Many markets have already hit a saturation point for new smartphone demand and are dependent on replacement demand,” Counterpoint research director Tom Kang wrote in the report. “Buying a more expensive device results in extending the length of replacement cycles, especially when your earnings are limited.”

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