The worldwide slowdown in smartphone sales and shipments is making suppliers pause to reconsider how they innovate, according to Gartner.
With the annual Mobile World Congress show just days away, attention is again turning to a wave of new smartphones to be launched at the fair in Barcelona, but analysts doubt there will be any great leaps forward in capabilities this year.
Speaking to Computer Weekly, Gartner research director Anshul Gupta
said that because fewer people are buying high-end smartphones and
choosing instead to either sweat their devices for as long as possible
or go for a cheap and cheerful replacement, there is less capital
available for R&D.
“There are some areas where smartphone manufacturers can ramp up
innovation,” said Gupta. “But these are more around services, such as Apple Pay, connected homes, and so on.”
Gupta’s colleague Roberta Cozza said suppliers will begin to offer
more and more bundles of sensors and enhanced connectivity standards to
support the smartphone’s role as a hub for the internet of things.
“We should also observe the evolution of biometric technologies,
which enable authentication as well as more personalised device
experiences,” she said. “New biometric technologies will go beyond
fingerprint and increasingly include voice, facial recognition and other
modes to enable authentication.
“I expect immersive experiences, such as augmented reality (AR) and virtual reality
(VR) capabilities, to be another key theme in 2016. For example,
Samsung Gear VR already uses a smartphone as a portal for VR
experiences, and we expect continued development of this more mainstream
approach, together with the consumption of 360-degree videos.”
According to Gartner, smartphone sales to end-users totalled 403
million in the final quarter of 2015, up 9.7% on the equivalent period
in 2014, the slowest rate of growth since the market’s inception eight
years ago. Sales of Apple iPhones actually declined year-on-year.
By Gartner’s reckoning, the top five suppliers in the year-end
quarter were: Samsung, which sold 83.4 million units, accounting for 21%
of the market; Apple, which sold 71.5 million units; Huawei, which sold
32.1 million units; Lenovo, which sold 20 million units, including
Motorola devices; and Xiaomi, which sold 18.2 million units. Other
suppliers sold 177.8 million units.
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Gupta said the market continues to be driven by low-cost smartphones
in emerging markets, and aggressive pricing from local brands leading to
more consumer upgrades coming from countries such as India, which is in
the throes of a major 4G roll-out, and Indonesia.
Even so, said Gupta, 85% of users in the Asia Pacific market are
replacing mid-range or entry-level devices with the same category, and
margins are further squeezed for suppliers by currency devaluations
against the US dollar.
More developed markets, such as Western Europe and North America, may
also begin to attract the attention of cheaper, insurgent suppliers in
the near future, said Gupta.
“Brands such as Xiaomi are increasingly selling through online
channels in Europe, but if they want to put feet on the street, they
will face challenges around establishing legal offices, licensing and,
in some cases, even copyright law,” he said. “It will take a long time
for such players to have offices, established after-sales service and
warranties in these markets.”
