What factors are driving sales of smartphones around the world?
The growth of mobile computing has led to higher sales of smartphones around the world. According to Gartner, total sales of smartphones globally are expected to decline in 2019 by 2.5% compared to the previous year. However, its report shows that total sales will still remain above 1.5 billion units. China is the largest smartphone market followed by India, the United States, and Brazil. The three market-leading brands according to a Gartner report for the second quarter of 2019 were Samsung, Huawei, and Apple. As per the report, during the second quarter of 2019, smartphone sales around the world totaled 368 million units. Samsung was the market leader with a 20.4% market share.
Even if smartphone sales have declined in 2019, their adoption has peaked and the market of related accessories itself is worth billions. There are several factors that have been driving the adoption and use of smartphones including people’s busier lifestyles, growth in channels of digital entertainment, digital well-being as well growth of mobile computing. The arrival of 5G is again expected to drive demand higher. From banking to e-commerce and entertainment, people use smartphones for so many tasks daily. For several, a smartphone is now a substitute for bulkier laptops and they use it even for managing business and office tasks. Moreover, companies are loading them with features that are known to increase people’s productivity.
Changing customer lifestyles:
Customers’ lifestyles are changing around the world. The proliferation of the internet has brought a large number of opportunities. However, busier lifestyles have also resulted in the growing use of mobile gadgets. The need to remain connected with others throughout the day has also led to the growing adoption of smartphones. These smartphones are our key to connectivity and whether it is telecommunication or messaging and other methods of connection, one smartphone serves all uses. Moreover, lives are complex and busier now not just in the developed world but also in the developing world. People need to stay connected on the go. Smartphones are the main method of connecting with family, friends, and businesses. Throughout the day, people reach instinctively for their phones for multiple tasks from shopping to banking and messaging.
People access a wider range of services online. These and other changes in their lifestyles are driving higher adoption of smartphones worldwide. Globally, digital technology is now a core part of people’s lives. Whether for digital well-being or digital entertainment, worldwide a large number of consumers rely upon smartphones to access information and entertainment. Thousands of lifestyle apps in Google Play cater to people’s health-related and other needs. Those who like reading can access books online using their smartphones. Large-screen smartphones serve a large variety of needs in people’s daily lives, which is also a reason that the popularity of large-screen smartphones is so high.
Online entertainment :
Previously, television and cinema were the main channels of entertainment for people. However, the number of entertainment channels has grown with the proliferation of internet technology. The arrival of 4G led to faster growth of online entertainment services. From social media to Netflix and YouTube, all of these can be accessed online through smartphones. 5G will further revolutionize the world of online entertainment. The number of streaming video channels has grown very fast. Apart from Netflix, Prime Video, and Hulu, there are more platforms that deliver on-demand videos including YouTube and which can be accessed online using smartphones. A large base of smartphone users now depends on online channels like Netflix and Prime videos for their daily dose of entertainment. Large-screen smartphones are now highly popular among online gamers.
The smartphone and tablet gaming market is growing at 20% annually and by the end of 2019, it is expected to be worth above £1.2bn. Moreover, the share of smartphones in this industry is above 80%. A large number of gamers start playing on their smartphones right at the time they wake up and several like playing games while they commute. Gaming is one of the core elements of digital entertainment. Online gamers like smartphones with higher processing power. While on the one hand, large screen phones with high processing speeds are good for gaming, the arrival of 5G could further boost the sales of online games. In this way, smartphones continue to remain the drivers of digital entertainment. A very large part of the global population continues to access its daily online entertainment using smartphones, which is driving higher smartphone sales and adoption.
Growth of mobile computing :
The growth of mobile computing has also led to higher smartphone use and adoption among people. There are thousands of productivity apps that are mainly targeted at increasing the productivity of professionals. Service providers like Uber use large-screen smartphones or tablets for using Google maps. Mobile computing has increasingly grown popular because of the convenience it offers. Everyone would not open a laptop to access social media, google maps, YouTube or browse the internet. Smartphones are easy to carry around and they have screens large enough to surf the internet or to stream online videos and use Google maps. Mobile computing offers higher convenience and helps professionals save time on ordinary tasks.
While people will still need laptops for larger tasks but they can still easily send emails and receive information or read documents on their smartphone screens. There are thousands of other productivity apps also which allow users to manage their finances, download and read documents as well as share information with other users. Several tasks that could earlier be accomplished only through laptops can now be completed easily using smartphones. Customers can now make payments at retail stores using their smartphones instead of cards. At least for shopping, browsing and banking or messaging, there is no need to open a laptop. The growth of mobile computing has made it easier for users to access a large variety of services while on the move. However, in terms of mobile computing, smartphones are the most preferred gadget for users.
Prices and availability :
Over time, the prices of large-screen smartphones have come down. Apart from the premium models which may be out of reach for the lower-middle-class consumers, there are several affordably priced models in the market with larger screens and 4G connectivity. The higher availability of such models has also led to increased adoption of smartphones. A large number of smartphone models are now available in stores or online at $300 or above. Moreover, customers do not always need to visit a physical store to buy a smartphone. They can easily purchase from authorized online resellers like Amazon, Alibaba or Flipkart. Higher availability and lower prices have also led to higher adoption of smartphones.
4G and 5G :
The arrival of 4G revolutionized the way how people accessed online services including entertainment and other services. America is leading the world in 4G technology. 4G has benefited the US economy in several ways like higher employment, higher domestic revenue as well as an increase in overall annual GDP. The advent of 4G propelled internet-based services into a new era. 4G proved to be a significant jump from 3G. With much faster download speeds, 4G made it a lot easier for the users to download or stream any stuff from the internet. Accessing the web, instant messaging as well as social media, and video calling are easier with 4G. It also allowed access to high-definition mobile TV.
So, 4G made the widespread use of mobile internet a reality and led to growth in demand for large-screen smartphones and 4G enabled devices. 5G is expected to make things even faster. While demand for smartphones has plateaued in 2019, it is expected to grow again in 2020 with the arrival of 5G. It could lead to an explosion of products and services that require blazing fast speeds. However, the demand for 5G enabled smartphones will also grow and online gaming could also take a significant jump. All these things indicate that 5G would prove to be a significant driver of smartphone demand.
Technological innovation :
Another key driver of demand for smartphones is innovation. Technological innovation is a source of competitive advantage in the smartphone industry. It is also a source of differentiation for brands. The sales of iPhone 11 were better than expectations and the main reason was the focus on technological innovation. Apple introduced triple cameras and A13 bionic chip with higher processing power. The result was that Apple had to ramp up production to cater to extra demand. Nowadays there are several smartphones available in the market that come with highly powerful cameras. Apart from performance, speed of processing, companies are also investing in bringing innovative cameras so customers like their models more than the rivals.
Companies are investing in research and development aggressively to equip their smartphones with improved features and to grow their customer base. Samsung, Huawei, and Apple are known to invest a lot in research and development. Google also keeps improving its Android OS which is used widely across smartphones. In this way, technological innovation is a significant factor that affects the demand for smartphones.