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Smartphone Sales Are in Freefall, and That’s Okay (ifixit.com)
77 points by mrzool 71 days ago | hide | past | web | favorite | 74 comments

IMHO some major brands have been pricing themselves out of the market with their newest phones. They've been letting the prices creep up much faster than inflation for several years now and they've hit the point where people can't afford the flagship phones anymore. Combine that with the feature sets leveling off and you have a recipe for not upgrading your phone every two years.

The big question we should be asking is "what's the next big thing?" Smartwatches seem to be the answer Apple is going with, but I'm not sure they've broken out of being a niche device yet. They feel more like tablets to me, something that hits its peak way too early and ends up being mostly neglected after a few years.

I use smartphone as camera. The single most important reason to upgrade smartphone for me is better camera because all the photos you take most likely going to live forever, probably spanning multiple generations. I think there is still lot of juice left in this area. If someone came out with new AI camera that started producing amazing super resolution wide lens images with professional colors, night vision, infrared, UV photography etc - that would be a huge deal. Battery is next most important issue especially when you are travelling and taking pics all day. If someone cracked battery issue or made this more power-efficient that would be huge case for buying a new phone. Headphone jack, non-slipper surfaces, not having to put ugly case on it - is 3rd most important reason to buy new phone. Peripherals, ability to use smartphone for other devices etc is probably the 4th.

But you see the problem... Folks have been rapidly increasing prices while giving nothing that customer wants.

I am using pixel 2 on Google Fi. My monthly bill is around 20 or $30 per month. The phone is rock solid and has no malware or bloatware and I see myself using it for several more years.

I think that could be one of the reasons for sales falling off a cliff.

AR glasses, I'd bet. Interest in smartwatches has remained lukewarm despite years of aggressive improvement. But if a company could put a HoloLens in the frame of a stylish pair of glasses - using AR tech which Apple and Google have both been aggressively innovating on in their respective phone frameworks - I think that could be a very real improvement over these awkward rectangles we have to fumble with and drop and which constantly pull our eyes away from the world around us.

The hardware challenges are significant, but the same was true of the original iPhone. And we know Microsoft and MagicLeap are both making lots of progress - I wouldn't be surprised if Apple and Google are doing their own hardware research.

Personally I'll put off upgrading my iPhone as long as possible just so I can keep a headphone jack. I listen to music on the phone, I hate dongles because I lose them, and I have headphones that cost more than the phone did.

I think Apple is aiming for a cycle of computer, phone, tablet where you get a new one in the sequence every 1-2 years.

Tablet -> never got used to them (iPad). Maybe with the new iPad OS Computer -> once every 5/6 years Phone -> every 2.5/3 years

I know that tablets last a long time for most people I know.

And that’s all fine. Why do we need to buy new hardware? No need. At least not for now.

I’d like to buy a new MacBook. One with more disk space than 512gb. Hopefully more than 16gb, but 16 works. Maybe a faster cpu, because things are bloating. But I will wait.. wait until I’m able to get a proper keyboard.

I'm using a 2011 MacBook Air right now for dev, and the only roadblock is that I can't upgrade the OS past 10.10.5.

Ooh, thanks :) Just after I built a new version of Ruby and everything ...

Hmm, now that you bring it up...here I thought I was sticking it to the Apple Man by hanging on to my phone, not buying a new watch every year, let that iPad get a few generations behind; don't have to buy every new thing that comes out.

But as you point out, I'm going to be buying something new from Apple every year or so regardless. BTW, isn't AppleTV about due for a refresh?

Yeah the watch is underestimated. Close to 100M devices (rough estimate I cobbled together from 2017-19 data) is hardly a niche.

"They've been letting the prices creep up much faster than inflation for several years now and they've hit the point where people can't afford the flagship phones anymore"

I think it's because you don't need a flagship. 10 years ago phones were crap (let's be honest) - slow, small etc. You needed to pay a lot for a phone with a decent battery life, large screen etc. Now you don't. It's like 3d graphics cards back in the day. You needed quite an expensive one for games to look good. For years now though you've been able to play pretty much every game with very cheap graphics cards so long as you're happy to turn some of the settings down a little.

With Android, you know you're phones going to get abandoned with 18-24 months so why not get a £250 phone instead of a £800 one?

Non-Apple smartwatches are handicapped by WearOS development. Apple seems to be ahead of the game and Google is lagging behind with WOS. I'd love it if they focused some more on it, though I do use my watch for fitness and sleep tracking and it's pretty solid in that regard.

Another analog to the tablet market, which Google has more or less given up on at this point. Pretty much the only tablets sold these days are iPads and Kindles.

I really am a big fan of the Apple Watch and have bought every generation since the 2nd one but it's still limited without an iPhone (ie no way to browse the web). They will need to solve the problem of screen size before it could truly be a replacement. Perhaps some sort of folding screen or projection. I would also love for them to embed a camera in the watch near where the crown is.

Everyone has Airpods and an Apple Watch to go with their iPhone now. That's an extra $169 and $399.

Apple sold ~50M Wearables in 2018 ($10B wearables revenue ÷ $200 ASP) vs ~200M iPhone sales. So, less than 25% of iPhone users probably have Airpods or an Apple Watch. Realistically, given that phones last multiple years, the number is closer to 10%.

I don't know a single person that owns neither, and I know at least a couple dozen people with an iPhone.

4 out of 6 people in my cube farm own airpods. I see them everywhere. These things are incredibly popular with the under 35 demographic.

I do occasionally see people with AirPods, not so sure about Apple Watches though.

"Smartphone sales will drop 2.5% worldwide by the end of 2019, according to research firm Gartner. In North America, the drop is 4.4% from 2018 levels"

I don't know what the actual definition of "freefall" is, but I was surprised to see the actual numbers were low single digits.

It's a bigger delta from the 50% or so growth year over year that they were seeing just 5 or 6 years ago.

Again people see exponential growth and they extrapolate it out forever for unlimited profits but then get disappointed when the actual growth is an S curve.

Norvig's Law: Any technology that surpasses 50% penetration will never double again (in any number of months).

Well, it could double again if it crashed first. If your growth is purely unidirectional that seems rather obvious.


It can't double its market share, but the market itself can grow, and that translates to the bottom line as well.

As a single anecdotal datapoint, I haven't bought a new phone since my iPhone SE, and I got that on an installation plan. I also have not upgraded my OS for quite a while either. Ultimately, I can't afford to just buy a new phone in cash without thinking ahead, and I am loathe to add another $30+ a month to my expenses for little perceived benefit. I don't care about the camera. I don't like the bigger phones, and I do not like how each new OS update from apple slowly "breaks" the older phones. I'm pretty much going to hold out until either all my apps no longer work or the phone actually has a hardware failure. I still get a great battery life. I'm pretty sure I'm just an old man yelling at a cloud though.

I think there is a big market for the SE. Aside from people like yourself who like the form factor, I want buy them for my kids. A) They are cheap, B) with an otterbox they are pretty much indestructible, C) I can use the apple ecosystem to do a bunch of stuff like backups, tracking, remote wipe, reuse apple music subscriptions and purchased music, etc. D) if it breaks or gets lost, I only get 50% mad.

My son has had one for 3 years, it's still great. I stupidly bought my daughter an iphone 8 because they didn't have the SE in stock anymore, and she dropped it 100 times (with case) and then finally dropped it in the toilet. I have $250 left on the installment plan, so she's sans phone until I buy her the cheapest Android imaginable as that's my only choice these days.

I like my SE so much that I bought a spare last time they were in the online store to use when this one is kaput. I have a spare one for my wife, too, when her current one is done.

If Apple introduces another phone in that size range before I have to break out the backups, especially if it's in the $400 price range, then I'll buy the new phone and give the backup ones to my kids.

For what I need from a phone, the SE is as good as I have been able to find.

The iPhone 7 and 8 are water resistant. Dropping it in the toilet (beyond the yuck factor) should not have done anything to it. Did she flush it as well?

Haha. This is me—5s with an Otterbox and a _lanyard_! You know how gun slingers notch their Colt with how many men they’ve gunned down? My Otterbox has seven notches from how many fatal falls it took. Big love for the 5s

How did it not survive the toilet? Unless the screen was badly cracked or something, it shouldn’t admit any water for a very long time at that depth.

She previously dropped it so many times that the glass was cracked and chipped off in places, so water just rushed in I'm sure. Not blaming the phone at all, it was amazing it lasted long enough to take a swim in the toilet.

Maybe people realized they didn't need the newest phone.

I have a 5 year old phone and I could buy a new faster one with fancy features, but for what?

This one can do calendaring, maps, notes, todos, web browsing, apps, so there is no compelling reason to upgrade.

For what? My answer was always for the camera! But now I have a 2-year-old phone with a pretty great camera and I'm not sure I need a slightly better one for $1000. All I need is a new battery.

Cameras are magic upgrade desire devices: no matter how good my camera is, my average snapshot will always be worse than the carefully selected best of the best of others. This is never a fair competition, it's hardly every the camera's fault, but it's where blame will fall nonetheless. Cameras will never be good enough.

But are right of course, even cameras won't save the two year upgrade cycle. There will be an even more improved camera next year, just hold out a bit longer. Repeat until the old phone is actually broken. Everybody wins (long term even phone mallets will need a livable planet)

I don't care about the camera, so I have absolutely no reason to upgrade.

Maybe if they come out with a phone where the battery will last for a week or more then I'll upgrade.

> come out

It's available for purchase now. Uniherz have a track record of delivering. Two phones now delivered as per promises of their previous Kickstarters. I have one of them (the Jelly Pro) and am completely satisfied with it.

If someone wants a rugged, long battery life phone (this has a 6000mAh battery) it would be a reasonable bet. No different from pre-ordering from any other hardware manufacturer.

I bought an iPhone XS last year. I don't know if I've ever been this completely, holistically content with a digital device before. Literally the only hardware improvement I can think of that might convince me to upgrade before it breaks is a smaller screen, for easier one-handed use.

I'm sure they'll come up with something eventually. But as a gadget enthusiast, it's weird not to be clamoring for details about the next model. My phone is like my car now.

"Literally the only hardware improvement I can think of that might convince me to upgrade before it breaks is a smaller screen, for easier one-handed use."

Out of interest, why didn't you go for the XR?

The XR is bigger, has a worse screen, and is generally uglier. I'm not saying those things don't matter; it's just that incremental improvement is no longer enough for me to buy a whole replacement device. I wouldn't retire the phone I have just because an even-sleeker one with an even-better screen came out.

agreed. i was a big fan of the SE, but finally took the plunge when i realized that because of the smaller screen, i was being shorter with my replies, which had an effect on convos.

the price is of course killer, but i haven't dropped a phone, and it should be fairly future proof, so in the end i think it made sense.

that said, i still dream about a world where android isn't controlled by an adtech company. hardware-wise, the oneplus x was perfection, but the software and lack of timely updates let it down.

When the iPhone 6S came out the iPhone 4S seemed like a dinosaur. Now even though the iPhone 10S is out the iPhone 6S works just fine. It happened in PCs and now it's happened in phones -- the annual increase in specs eventually passed the needs of most of the market.

Last year, I replaced an iPhone 6 or 6s with a 7. It works fine and was about half the cost (or less) of the new hotness. Presumably a lot of people are thinking the same.

Not to mention the environmental benefits! I always encourage the use and re-use of older machines - especially those that can be updated.

The trend of soldered RAM is so awful for the environment. :(

Video games used to push the PC market, I remember when you used to have to pay attention to minimum requirements. The last 10 years of video game development has focused on indie games (Minecraft, pubg, etc), and you can run these games on a potato. Why would anyone run out to get a new machine?

Same thing with smartphones. Until a killer app comes along that pushes hardware, there’s no reason to upgrade - any iPhone past the 5 does pretty much everything the XS does.

It seems (to me at least) that each new generation of flagships don't have enough incremental advancements to justify the price tag ($1-2k).

The price can also be incremental if the previous year’s device is sold to cover some of the new device cost. iPhones, in particular, retain a significant portion of their value after 12 months.

This is the biggest reason the Samsung Fold, for all its very big problems right now, is so exciting to me. That seems like a major change with exciting possibilities

It is certainly new, but I have a really hard time thinking of a single time I wished my phone could fold out. Better battery? Check. Better handling of notifications? Check. Better one-handed use? Check.

Fold out? I appreciate the newnes, but no.

There’s hoards of people out there waiting for a new phone with new specs and camera but without anti-features like removal of headphone jack and faceid

How about multiple day battery life?

You probably don’t even need that much more battery, just a smaller screen and slower cpu/gpu.

Battery life used to be an important issue but now people have gotten used to carrying power banks around and it seems less important than it once did.

Pay 1k+ for the privilege of exchanging one black slab for another black slab with incrementally better specs?

Maybe next year Apple...maybe

One could argue that it isn't the stabilization of specs but that of appearance that is harming sales. Many consumers purchase an over-priced product/brand because it is over-priced if they can show it off in public. But that only works if it looks different from the lower cost or older models.

Yep. Also, they straight up stopped improving from a user perspective. Better specs doesn't mean more value.

I have a Nokia 6.1, it’s build quality isn’t differentiator from my partners iPhone and it’s aesthetic is really nice, black and copper.

One was 900 the other 169.

The market is just weird.

Echoing some of the other comments on this story, we've reached a point where the marginal return on value for upgrading your phone is very low at the moment. From a design perspective, the thin bezelless/buttonless slate makes it difficult to differentiate your product. The apps you use will be the same and will more or less run the same, since mobile applications are rarely bottlenecked by the CPU. Any improvements in camera quality are almost imperceptible. Same with screen/display quality. What is the incentive to upgrade?

It is possible that the "smartphone" form factor has become a commodity and the market is overly saturated with products. I think we won't see another consumer electronics explosion until other form factors start to become more ubiquitous (smartwatch, smart AR/VR HMDs, actually smart TVs, smart speakers, smart automobile infotainment, etc.). Specifically, I think smart HMDs are going to be the future once chipset and battery technology are advanced enough to make them sexy.

> "From a design perspective, the thin bezelless/buttonless slate makes it difficult to differentiate your product."

this plays directly into apple's strengths (build quality, UX, etc.), and i'd be very impressed if it had been a conscious strategy employed by apple over the years (apple still captures the majority of industry profits). by collapsing the feature space along (roughly) one dimension, it's easier for consumers to recognize the premium positioning of apple's iphones.

A few month ago the foldable screens were hyped like crazy. Maybe it was too soon but it could be another differentiator if done well.

From a end user we aren't really seeing drastic changes in quality of life. My midrange Android phone is going on 3 years and is still snappy and fast. Used to be after 3 years you were starting to rethink your app choices, constantly closing stuff, and looking for replacement phones.

Also seems I see fewer spiderweb phone screens which is probably a combination of more durable screens and reasonably priced screen replacement services.

So folks who like new things are handing down their functional devices to family members, selling used, etc. when they upgrade.

I thought iPhones used to be cheaper. I paid $599 for my iPhone 4S (my first iPhone) and paid $699 for my iPhone 8 Plus (my current phone)

$599 in 2011 dollars is $682.09 in 2019 dollars.

Early iPhones were subsidized by carriers so maybe that's why they appeared cheaper. Its always been expensive for a new unlocked version.

4S is hardly an early iPhone. The iPhone 2g (original) and 3g were the only ones sold purely subsidized. In 2010, Apple began selling the iPhone 3GS unsubsidized for $399.

Who wants to spend a $1000 on a phone every year or every other year? My smartphone is 6yrs old, I have rebuilt and rebuilt it many times. It's pretty much EOL. When I replace it, I don't want to spend more than $300. They need to figure out ways to make them cheaper.

There are so many features I want in a phone, and can't get. It's very frustrating.

I've seen youtube reviews of some pretty nifty game controllers that turn phones into something like the switch/vita/psp... I have to wonder if there's some low hanging fruit in bundling such controllers with the phones.

A 2.5% yearly decline while sales are sky-high isn't a freefall, yet.

For privacy reasons I have never had a smartphone and tend to use cash for real life expenses. My friends 10 years ago were joking at me, now they understand.

> About 1.46 billion smartphones were produced in 2018, while 1.56 billion were sold. If production drops back to match lower sales, that could mean 38.44 million fewer phones made. And if all those phones were about the size of an iPhone X, that would mean about 400 pounds each of mined ore, water, and other resources were conserved, a total of 15 billion pounds.

The problem is that capitalism is running on selling always the latest products. The product, in general, shouldn't last long. So even if you don't need a new phone, they are going to force it to you. I don't think this latest trend is going to last. After all, "Smartphone sales will drop 2.5% worldwide by the end of 2019" as it is stated in the article. Not a huge drop.

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