Two Reasons Why Smartphone Sales Declined For The First Time In 2017

Has the smartphone market reached its saturation point? It may or may not be the case, but their number of purchases have declined for the first time. According to a report by Gartner, smartphone sales figures recorded the first ever decline of 5.6% in Q4 2017. Around 408 million smartphones were sold globally in the same period.

So, what could be the reason for this drop when more and more people are becoming aware of smartphones and their usage. According to Gartner’s research director Anshul Gupta, there are two reasons behind the sales numbers fall.

The first is the rejuvenation of feature phones in the market. When combines with the lack of quality “ultra-low-cost” smartphones, it has led to a slow down in upgrades from feature phone to smartphones. People are going for quality feature phones instead.

Another reason is that people are making bigger investments on high-end smartphones and keeping them for an extended period of time. For example, a cost concerned user may retain a device like iPhone X or Galaxy S8 for more than a year’s time.

The inability of the manufacturers to meet consumers’ high expectations has also contributed to weakening the smartphone sales. When releasing new smartphones, the lack of innovation delivers only a few incremental benefits over the existing technology. This could be one probably a reason why users would want to stick to their existing devices.

Despite the drop in the sales of S8 and S8+, Samsung managed to remain on the top of the list by selling 74 million smartphone units in Q4 2017. Although, they ended up with a 3.6% decline in their year-on-year sales. This is another victory for the Korean tech giant after recently beating Intel as the world’s largest chipmaker.

Apple follows Samsung with around 73 million units. When comparing the sales number for Q4 2017 and Q4 2016, Huawei and Xiaomi are the only top smartphone sellers that managed to record a sales growth.

The story is different in the case of the annual smartphone sales worldwide where the overall smartphone sales have boosted since 2016. Expect Apple, major vendors have recorded an increase and Samsung managed to capture around 21% of the global market share in 2017. The iOS-powered devices also saw a defeat in the worldwide sales, where Android won a one-sided match with over 85% market share.

You can read Gartner’s report here.