Why is the global smartphone market in decline?

The global smartphone market is in decline… why?

When the history books are written about 2020, they won’t be kind.

Coronavirus will undoubtedly take most of the headlines, alongside ham-fisted governmental attempts at controlling it – and the lasting consequences of those actions.

However, other factors have also made this a thoroughly depressing year.

There’s the chaos surrounding the American presidential elections, allied to the ongoing trade war with China, which saw Huawei banned from using the Android operating system on its phones.

There’s the accelerating decline of the high street, with numerous retailers and service providers going under or rationalising their portfolios.

Manufacturing has been badly damaged by everything from supply chain interruptions to staff shortages.

There’s also the looming spectre of fast-rising unemployment, both domestically and internationally.

As such, it’s little wonder that vanity purchases like high-end smartphones have seen a huge drop over the last six months.

Indeed, the global smartphone market has arguably never faced such challenging times.

And this might have significant effects on the next generation of handsets.

Look to the east

Four of the world’s six biggest smartphone manufacturers are Chinese – Huawei, Xiaomi, OPPO and Vivo.

South Korea’s Samsung still dominates the global market, while Apple is the third-biggest brand between Huawei and Xiaomi.

Between them, these titans of manufacturing have seen their market shrink by a remarkable 16.7 million units in the second quarter of 2020, compared to the same period in 2019.

Each has faced its own unique challenges.

Samsung has the greatest exposure to the markets most affected by Covid-19, while Apple’s premium pricing sits uneasily with gloomy predictions of economic hardship to come.

Huawei has been crippled in Western markets by being prevented from installing the Android operating system (or Google software) on its phones.

Although its HarmonyOS could pose a legitimate challenge to Android, buying a Huawei smartphone currently involves some clunky workarounds and awkward compromises.

It’s been estimated that the global smartphone market will see an 11.3 per cent decline in the number of units manufactured during 2020, compared to last year.

Nothing new under the sun?

One of the problems facing smartphone manufacturers is a general lack of compelling new features across the industry.

It was hoped 5G might provide a reason to upgrade, but its rollout has been hampered by the impact of Covid and a blizzard of half-baked anti-5G conspiracy theories.

Apart from lacking 5G, a Huawei P30 is extremely similar to the much more expensive P40. Both have 128GB of storage, a 32MP front camera and a 6.1-inch, 19.5:9-aspect screen.

Similarly, Google’s brand-new Pixel 5 is cheaper than some Pixel 4 models, sacrificing gimmicky features like motion detection in favour of proven fingerprint unlocking technology.

This lack of innovation is a key reason why the global smartphone market is in such a rut – people are retaining their existing handsets for longer.

In the current volatile and uncertain climate, that looks like an eminently sensible course of action.

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