It seems global consumers are wising up when it comes to upgrading their smartphones.
Smartphone makers saw the first quarterly decline in the last three months of 2017, compared with year-earlier figures.
“Global smartphone shipments declined by 9 percent, from 438.7 million units in Q4 2016 to 400.2 million in Q4 2017. It was the biggest annual fall in smartphone history,” according to Linda Sui, director at researcher Strategy Analytics.
Last year’s holiday shopping quarter saw Apple offer two new models — the iPhone 8 and the iPhone X — but the company could not increase sales.
In the fourth quarter of 2017, Apple sales were down 1 percent compared with the same period of 2016, Sui said.
Sui added that the reasons for the decline were longer replacement waits, fewer operator subsidies and “a general lack of wow models.”
Sui said a big part of the falloff was due to “a collapse” in the huge China market. There, she added, demand fell by 16 percent last year.
Industry observers have noted that in recent years the pace of global growth has been slowing. They cite maturing markets and consumers becoming less inclined to chuck their old phones in favor of pricey new products.
The pool of first-time [smartphone] buyers in the US, Europe and China “is shrinking rapidly and sales are now primarily from upgrades,” according to a recent report by Business Insider.
“There has not been a feature that has caught the imagination of the public yet and given them a reason to upgrade,” said John Oldshue, editor of SaveOnPhone.com.
He warned that cellphone providers “are addicted to a yearly replacement cycle” but cellphone consumers increasingly are not.
Oldshue said Apple is feeling the pressure of declining sales. He said sales of its iPhone X have been disappointing.
“I think they will try to drop the price below $1,000 again,” he predicted.
These sluggish iPhone sales have been part of a trend, said Neil Mawston, executive director at Strategy Analytics.
“Global iPhone volumes have actually declined on an annual basis for five of the past seven quarters. If Apple wants to expand shipment volumes in the future, it will need to launch a new wave of cheaper iPhones and start to push down, not up, the pricing curve,” Mawston said.
Oldshue speculated that later this year, Apple and others will give incentives to consumers to purchase new models by offering to buy back their old models when they do.
Besides Apple’s slowing sales, Mawston said that cellphone industry leader Samsung also faces challenges.
“Samsung is under pressure from Chinese rivals in some major markets like China and India,” Mawston said.
Mawston added that Samsung continues as the top player in the global cellphone competition. It “remains by the far the largest smartphone brand on a global basis, shipping an unmatched 317.5 million units in full-year 2017.”
But despite the strengths of the biggest cellphone sellers, the lousy fourth-quarter sales worsened what had been a so-so year in global smartphone sales.
In 2017, global smartphone shipments rose by 1 percent, Strategy Analytics said. It noted that last year, smartphone sales topped 1.5 billion units for the first time.
But although overall sales were up for the year, they were up by only 1.3 percent.
Neither Apple nor Samsung, two of the biggest players, responded to requests for comments.