The smartphones market has traditionally been one of the healthiest markets in e-commerce. Is there anything more natural than buying a smartphone online? However, things are getting difficult lately. IDC reports that developed markets are behaving under expectations. IDC states that the growth of smartphone shipments is less than 2%, which is considerably lower than in past years. Besides, the smartphone market forecast in China is a decrease in growth due to the maturity of the market.
It is not that smartphones are over, but everyone already has one. For instance, BBC News reported that according to a Deloitte research, 80% of UK adults have a smartphone. Actually the report provides some information about how much UK users depend on their smartphones, so the product is far from being out of fashion.
The real change is that the market is becoming more and more competitive. And in this area Chinese smartphone producers have something to say. According to Gartner, after Samsung and Apple, the next three competitors in the market are from China: Huawei, Oppo and Xiaomi. But some of these Chinese competitors are not very well known in western markets like Europe and the US. They are trying to enter a market dominated by two powerful brands such as Samsung and Apple, but they also have a greater potential for growth. Since Apple and Samsung are already known in China, they don’t have the same growth potential as the Chinese brands in the West. In this new scope of a mature market, price and other objective features will become more and more important.
Also, we have to see how the market reacts after Samsung’s issues with their Galaxy Note. We still can remember how a short period of problems affected Blackberry, which almost disappeared in several places. And we can’t forget Nokia. The Finnish company announced in May that they will sign a partnership with HMD to return to the smartphone market.
When it comes to the operative system, Android is winning the battle with iOS, which is lowering its share of the market from 18.6% to 11.7% in the 4 th quarter 2016. But we have to take into consideration that Apple products are favored by whims, and may get better numbers in the 4 th quarter with the holiday period than the rest of the year.
Some keys to keep an eye on:
- Ironically, Oppo, who is gaining a larger market share than all their competitors in China, is achieving its success due to a great offline performance. Again a great example of the importance of omnichannel strategies.
- There are still many countries in Asia, Africa and South America that have a great growth potential in smartphone penetration.
- In developed countries refurbished mobiles have a great popularity among users and sellers. However, governments can take actions against these practices, as what happened in India.
- In many of these countries that still have growth potential, bank accounts are not so generalized as in developed countries. Meaning that many users may be more comfortable using their smartphones to make purchases than credit cards.
- After the great success of Pokemon GO, we could see some movements in virtual reality to try to increase user interest.
And Google shakes up the world.
“Life just happens” This is what most of the competitors may be thinking right now. Recently Google announced on its blog (yeah, definitely you should follow it) that it is going to produce its own smartphone called Pixel. After a long journey with some premium partners in the production of Nexus mobiles, they have decided to walk alone. You can pre-order one if you live in the U.S., U.K., Canada, Germany and Australia. They price starts at $649 (see how the final digit of 9 in prices is still mandatory).
So for sure everything we have said will be affected by Google, a company that is used to reaching excellence in almost every aspect they try. And if Google thought that the smartphone market was over, they wouldn’t have invested money, time and effort in it. So we can assume they expect a profitable market for a long time.