Smartphone? Keep it in Your Pocket

June 17, 2016

Opinion

By Don Bishop

Executive Editor, Associate Publisher
AGL Magazine

How long one keeps a smartphone may have something to do with declining worldwide smartphone sales this year, according to market research firm Gartner. In June, the company issued a prediction that the growth in smartphone sales will slow to 7 percent (1.5 billion units) from 14.4 percent growth last year.

“Smartphone sales recorded their highest growth in 2010, reaching 73 percent,” Robert Cozza, research director at Gartner, said.

Another forecast issued in June, this one from International Data Corporation (IDC), says worldwide smartphone shipments will grow only 3.1 percent this year, a substantial slowdown from the 10.5 percent growth in 2015 and the 27.8 percent growth in 2014.

Both research companies pointed out that the length of time consumers keep their smartphones between upgrades contributes to slower growth. According Cozza at Gartner, in mature markets such as the United States, premium phone users are extending life cycles to 2 1/2 years, which he said is not going to change drastically over the next five years. The IDC report says smartphone resellers have shifted their emphasis toward trying to ensure that smartphone life cycles aren’t extended any further.

“IDC believes early trade-in programs, much like the one Apple is facilitating, as well as the broader range of cheap unlocked devices, will play a significant role in keeping mature market life cycles close to two years,” the company’s statement about its report reads.

What stimulates wireless infrastructure growth is not so much demand for newer devices as it is the time and bandwidth they consume. On that score, an analysis conducted by SimilarWeb found people across the globe are spending less time on Android social media apps in March 2016 compared with March 2015.

Mobile social networking is only one influential factor in the mobile broadband equation. It shares influence with mobile Internet, mobile video and mobile financial services. Information from Pyramid Research highlights that it took only five years for the number of mobile broadband LTE subscriptions to reach 1 billion, compared with eight years for Facebook and 11 years for legacy mobile services to reach 1 billion users. During this time, traffic increased exponentially, putting pressure on mobile network service providers that are experiencing only modest increases, if any, in their top line revenue.

Thus, despite the reported slower growth in smartphone sales and diminishing use of Android social media apps, other indications point to continuing demand for mobile time and bandwidth that will foster wireless infrastructure growth.