Smartphone segment in for another rough year – CCS Insight

Analyst firm CCS Insight is predicting the smartphone segment could be in for another year of drudge, with year-on-year shipments forecast to decline by 3%.

With cash conscious consumers still tending to favour refurbished devices, or holding onto their current smartphones for longer, it seems the sluggish segment could evade the booming landgrabs of yesteryear, that is unless you are a Chinese brand.

“Yearly sales of 2 billion mobile phones seemed so close just a few years ago, but might become a distant dream for the industry,” said Marina Koytcheva of CCS Insight.

“It is little surprise that all big mobile phone-makers are strongly pursuing the Indian market. India is one of the few oases where a significant growth opportunity still remains. However, it is Chinese brands like Xiaomi that are achieving the most success, which is of great concern to high-profile brands such as Apple and Samsung.”

Although the 2 billion annual milestone has been predicted many times, CCS Insight believe shipments will be around 1.8 billion for 2019. A new five-year outlook is for 1.9 billion on an annual basis until 2023.

Western Europe is perhaps one of the biggest contributors to the decline, with 35% of survey respondents suggested they will be holding onto devices longer, and only 13% stating refreshments cycles would be more frequent. That said, China is also not immune from global trends, with CCS Insight forecasting sales in the country will be down 9% year-on-year. This follows a 13% decline last year.

For the smartphone segment, it is a very similar story. It seems a lack of device innovation and a sense of more of the same is discouraging consumers from prying open their wallets, especially when the prices are so steep. The launch of Huawei’s P30 Series is an example of this. Priced between £899 and £1099, it will probably be an excellent device though is demonstrating little more than feature upgrades. It’s a lot of money to pay for incremental improvements.

5G might change this perception over the coming months, but it won’t be enough to save the fortunes of the segment in 2019. CCS Insight is forecasting 220 million 5G compatible devices will be sold over the course of 2019, though considering the limited nature of coverage and limited supply, this will have little impact on the dampening trends. This number will rise to 930 million by 2023, accounting for more than half of smartphone shipments, though it will be a slow burner by the looks of things.

It should hardly come as much of a surprise, but the smartphone segment might be in for another mediocre couple of months.