Falling sales growth could be the precursor to changing consumer dynamics
After years of unbridled growth, the global smartphone market seems to be entering a period of slowing growth. According to the International Data Corporation (IDC), smartphone sales recorded the smallest y-o-y growth in Q1 2016—a mere 0.2%—to 334.9 million from 334.3 million (Q1 2015). The world seems to have “mobile phone fatigue.”
The slowing sales can be attributed to multiple reasons—saturation in key developed and emerging markets, the slowing Chinese economy and the fall in the sales of Apple and Samsung devices. This quarter marks the first time that iPhone sales have declined since the iconic device was launched in 2007. That is primarily because there has been nothing truly new from the brand in a long while. Despite India being a bright spot—iPhone sales grew by 56%, though over a low base, and Samsung widened its market-share in the country—globally, Apple is down 10 million units (16.3 %) from 61.2 million to 51.2 million, while Samsung slipped 0.6% from 82.4 million to 81.9 million.
For Chinese handset brands, it has been a mixed quarter. While Lenovo is no more among the Top 5 brands, Xiaomi sales are down. Huawei (58.4%), OPPO (153.2%) and Vivo (123.8%) have notched huge gains. The big survivor is Huawei which is still in the Top 5 list. What’s evident is that in a slow growing global economy, people are postponing purchase of new mobile devices. While doing so, they are looking for cheaper devices that deliver almost the same experience as market leaders. It’s time handset vendors tried to match the sentiments of the global mobile consumer. Else, it could be tough days ahead for them.