Top

Smartphones to Show -1% Growth in 2018

The smartphone market will experience an annual decline for the first time in history

Seoul, London, San Diego, Mumbai, Hong Kong, Buenos Aires – November 3, 2018

According to Counterpoint’s latest smartphone forecast report, smartphone growth will drop to a negative 1.3% in 2018. This is a first in the history of smartphones that the market has contracted year over year.

It was a tough year already as the market had been experiencing negative growth since the fourth quarter of 2017. This negative trend is expected to continue in the September quarter and upcoming December quarter. After years of growth the smartphone market has finally come to a halt. To be accurate the market had enjoyed a CAGR (compound annual growth rate) of 16% for the last five years between 2012 and 2017. This is close to growing 16% every year.

This is a mixture of multiple factors starting from the global economy slowing down and exchange rates in emerging markets fluctuating rapidly as in the case of Latin America (see here). The US – China tariff wars aren’t helping the situation either. Some markets are cooling down after years of overshooting caused by extreme competition. But at the core of the weak demand could be the change in consumer behavior.

Commenting on the weak market demand, Research Director, Tom Kang explained, “Many markets have already hit a saturation point for new smartphone demand and are dependent on replacement demand. However, since last year consumers have decided to trade up whenever they had the chance and are thus going for a better device, despite the price difference. This is evident in the introduction of Apple’s iPhone X last year. But buying a more expensive device results in extending the length of replacement cycles, especially when your earnings are limited.”

Global Smartphone Shipments & Growth Trends

Longer replacement cycles have led to fewer smartphones consumed. However, it has a positive effect to manufacturers. Higher smartphone ASPs has led to more revenue; despite the negative growth in smartphone shipments, smartphone revenues are expected to show positive growth.

Tom Kang added, “Overall smartphone revenue may grow 9% compared to last year. This is even higher than the 7% revenue growth of 2017.”

The higher price points are justified by more capacity NAND flash storage, better processing power with AI functionality baked-in, more durable designs, and of course, more camera sensors for better picture quality.

Next year likely won’t be much different as the trend continues with the new Apple iPhone Xs Max introduced at a higher price point, Samsung’s foldable smartphone coming soon and 5G smartphones on the horizon. But again, smartphone ASPs will likely grow more steeply to offset the low volume growth.

The full forecast with the assumptions is available for subscribing clients to Counterpoint’s mobile device service. The methodology involves insights from consumer surveys, industry interviews and public IR documents. Feel free to reach out to us at press@counterpointresearch.com for further questions regarding our in-depth latest research, insights or press enquiries.

Analyst Contacts:

Tom Kang
+82 2 553 4813
tom@counterpointresearch.com

Peter Richardson
peter@counterpointresearch.com

Neil Shah
neil@counterpointresearch.com

 Follow Counterpoint Research
press(at)counterpointresearch.com

Tom is an expert in the telecoms industry with 14 years of experience. He provides practical advice for the short term goals of clients as well as insights for long term vision. Previously he was a celebrated world renowned analyst at Strategy Analytics. He first introduced value share and profit share. He also created the Smartphone Strategies service and headed the research growing it to become the largest service in the company. Tom also worked for LG Electronics within the Mobile Communications Company in various roles.

Term of Use and Privacy Policy

Counterpoint Technology Market Research Limited

Registration

In order to access Counterpoint Technology Market Research Limited (Company or We hereafter) Web sites, you may be asked to complete a registration form. You are required to provide contact information which is used to enhance the user experience and determine whether you are a paid subscriber or not.
Personal Information When you register on we ask you for personal information. We use this information to provide you with the best advice and highest-quality service as well as with offers that we think are relevant to you. We may also contact you regarding a Web site problem or other customer service-related issues. We do not sell, share or rent personal information about you collected on Company Web sites.

How to unsubscribe and Termination

You may request to terminate your account or unsubscribe to any email subscriptions or mailing lists at any time. In accessing and using this Website, User agrees to comply with all applicable laws and agrees not to take any action that would compromise the security or viability of this Website. The Company may terminate User’s access to this Website at any time for any reason. The terms hereunder regarding Accuracy of Information and Third Party Rights shall survive termination.

Website Content and Copyright

This Website is the property of Counterpoint and is protected by international copyright law and conventions. We grant users the right to access and use the Website, so long as such use is for internal information purposes, and User does not alter, copy, disseminate, redistribute or republish any content or feature of this Website. User acknowledges that access to and use of this Website is subject to these TERMS OF USE and any expanded access or use must be approved in writing by the Company.
– Passwords are for user’s individual use
– Passwords may not be shared with others
– Users may not store documents in shared folders.
– Users may not redistribute documents to non-users unless otherwise stated in their contract terms.

Changes or Updates to the Website

The Company reserves the right to change, update or discontinue any aspect of this Website at any time without notice. Your continued use of the Website after any such change constitutes your agreement to these TERMS OF USE, as modified.
Accuracy of Information: While the information contained on this Website has been obtained from sources believed to be reliable, We disclaims all warranties as to the accuracy, completeness or adequacy of such information. User assumes sole responsibility for the use it makes of this Website to achieve his/her intended results.

Third Party Links: This Website may contain links to other third party websites, which are provided as additional resources for the convenience of Users. We do not endorse, sponsor or accept any responsibility for these third party websites, User agrees to direct any concerns relating to these third party websites to the relevant website administrator.

Cookies and Tracking

We may monitor how you use our Web sites. It is used solely for purposes of enabling us to provide you with a personalized Web site experience.
This data may also be used in the aggregate, to identify appropriate product offerings and subscription plans.
Cookies may be set in order to identify you and determine your access privileges. Cookies are simply identifiers. You have the ability to delete cookie files from your hard disk drive.