Phone makers shipped about 4 percent fewer smartphones in 2018 than the year before according to reports out this week from IDC and Counterpoint Research.

IDC says that makes 2018 the “worst year ever for smartphone shipments,” as measured by growth (or shrinkage, in this case).

But it’s also worth looking at the possible explanations for the decline. What may look like bad news to the companies that make and sell phones could be good news for consumers… at least in the short term.

IDC says there are likely a few key reasons for the decline:

  • Most people who want a smartphone already have one, so there aren’t many new opportunities for phone makers to convince customers to buy their first phone.
  • People are replacing their phones less frequently than the used to and holding onto their old phones for longer.
  • Rising prices for phones could be discouraging some folks from buying the latest flagships.
  • Political and economic uncertainty could be playing a role as well.

At first glance, the fact that smartphone owners are holding onto their devices seems like a good thing to me: it’s cheaper and better for the environment if you don’t feel the need to buy a new phone every year or two. And if it still does what you need it to, why bother?

I also suspect that the recent push to produce phones with crazy new features like button-free, port-free designs, pop-up cameras, and foldable displays may be the industry’s reaction to lagging sales. Maybe the next off-the-wall idea will be the one that convinces people to buy new phones.

I’m less clear on whether that’s a good thing for consumers. On the one hand innovation is always kind of exciting and it’s nice to have new choices. On the other hand, it’s part of the reason for the rising price of smartphones… which leads to a vicious circle — if high prices are partially responsible for declining smartphone sales, and part of the response is to develop innovative new phones with even higher prices, where do you think that’s going to lead?

For now, not all phone makers seem to be suffering — while industry leaders Samsung and Apple saw year-over-year declines in the latest quarter, third-place company Huawei saw a pretty major increase in shipments.

HMD also saw a significant increase in shipments last year (Counterpoint says the company behind the Nokia line of smartphones shipped 7.7 million devices in 2017 and 17.5 million in 2018 for a year-over-year increase of 126 percent). And Chinese phone makers Oppo and Xiaomi also saw single-digit increases.

But overall both IDC and Counterpoint agree that global shipments for the year were down by about 4 percent, which is the biggest decline since phones started to get “smart.”

Still, overall global shipments in 2018 were still around 1.4 billion units. That’s nothing to sneeze at — by comparison  IDC says global PC shipments in 2018 came to about 258.5 million. That means phone shipments outnumbered PC shipments by more than five to one.

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12 replies on “Smartphone shipments declines in 2018, for better or worse”

  1. keep increasing prices and sales will slow even further..most of these phones seem to turn out to be nothing but trash ..no updates,,no support,,,what do they expect,,even your sacred cow “Apple” has fallen out of grace the past several years,,and they raise their prices EVERY YEAR !! did you ever think people may be “waking up ” ?

  2. For me the biggest reason is that Qualcomm has few offerings beyond 14nm, meaning the energy consumption will be largely the same on mid-range phones. Even better battery life beyond the days I get now are what would get me to jump to newer.

    1. The good news is that Battery Technology has improved since 2008.

      We’ve had devices start with around 1,500mAh capacity (which was large back then). They’ve steadily rised up to 2A, 2.5A, 3A, 3.5A, and finally to 4A.

      Hopefully large flagship phablets will hit the 5,000mAh in 2019, in particular, a dual-battery design to implement a dual-fastcharging design like the FindX.

  3. Google just needs to shave off one year of support for their devices and that should help the struggling industry. If other companies jump onboard with that, then all will be fine. There will be terrific, steady sales.

  4. You left out a couple of reasons:

    • The vast majority of smartphones are “good enough” these days, and there’s little need to upgrade more often than three or four years beyond losing or breaking your current phone.
    • Aside from a modest speed boost and perhaps a touch more storage, converging and stabilizing smartphone designs have been left with very little to entice users to upgrade on a yearly basis. Innovation is more about tinkering around the edges as opposed to creating new radical designs.
    • I have owned an LG G2 for several years, and it’s still a very service smartphone, great screen, and more than fast enough for 95% of everything a smartphone typically does, and the design is almost six years old at this point. The only serious issue was the lack of updates to Android, not because of security (which really isn’t an issue for the vast majority of users who only download the occasional app from Google Play), but the lack of support for the latest features available on the platform. Lineage OS helps, but it’s not remotely easy enough to install for the typical smartphone user.

      I only upgraded to a Pixel XL recently because (a) I wanted a better camera and (b) my LG G2 was beginning to fall apart. I don’t expect to upgrade again for another couple of years at least, possibly three or even four.

    1. The only issue was lack of updates to Android? Understate much? Imagine if Microsoft was so clever to shut down Windows XP without a real reason, but did it anyways. Imagine their good fortunes. Snuffing software out is easy. Google proves that point.

      1. Not really. Google doesn’t totally abandon Android users with older phones — they continue to support apps running on their platforms for far longer than two years. In fact they only just dropped support for updates on API levels 14 and 15 meaning that while apps will continue to run on Android 4.0.4, developers won’t be able to update them through the Play Store directly, and that was over seven years after that version of Android was released, and almost nobody is using 4.0.4 anymore.

        As you know, Google Play services provides a lot of backwards compatibility for features used in apps introduced in later versions of Android.

        Users with versions of Android going as far back as 4.1 can still install and run the vast majority of apps in the Google Play store, and typically only run into issue when there’s a feature not supported by the hardware. So, the vast majority of users won’t even notice when updates stop arriving from Google.

        The only other issue is security, and when was the last time there was a serious security exploit on older versions of Android bad enough to make your phone too risky to use? I don’t recall one. There have been a few potentially bad cases, and even then, patches for older versions of Android were released by many manufacturers. Otherwise, unless you start downloading apps from insecure sources, and stick to mainstream apps (which is what most people do) the odds of getting infected by malware are minimal.

        So yeah, not an understatement at all. Maybe it’s not ideal, but it’s hardly a major concern for the estimated 1.5 billion users whose phones are no longer being updated. If it was, we’d be hearing about it every day.

        1. Say what you want. Defend, defend, defend. Fact? Google support sucks compared to Apple. Google has complete control on their software and hardware just like Apple. Go ahead and support Google’s practice so that Microsoft will do the same with Windows OS and that Apple goes the way of Google too.

          1. *sigh*. Not defending anything. Just correctly assessing the current situation as it stands.

    2. Absolutely agree.

      Also, my LG G3 just keeps truckin, and as it does all I need (Including headphone socket), I won’t replace it until then. I drool at each new LG Vseries for that DAC, though.

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