Maksym Yemelyanov - Fotolia

Mobile phone sales drop as smartphone buyers bide their time

Slowing smartphone shipments contributed to an overall decline in mobile phone sales during the second three months of 2016, according to Gartner

Overall sales of mobile phones in the second quarter of the year were down by half a percentage point, according to analysts Gartner, as it became apparent that slowing sales of smartphones were no longer off-setting massive declines in sales of traditional or feature phones.

Although the smartphone market as a whole was up 4.3% over the same period in 2015, with 344 million units shipped, feature phone sales dropped by 14%.

Wider market trends, such as the much-remarked on tendency for users to sweat their smartphone assets, and a move away from subsidised two-year replacement cycles, remained evident, said Gartner.

Evidence that the smartphone market is in general commoditised, and the boom in sales is over, now appears inarguable, Gartner added.

However, Gartner research director Anshul Gupta also noted slowing demand as consumers wait for new hardware launches towards the end of the year, notably Apple’s next iPhone 7, widely tipped for a September 2016 debut.

Apple’s downward trend, with a decline of 7.7% in unit shipments to 44.4m, was not as pronounced as it was in the first three months of the year. Nevertheless, said Gupta, Cupertino would be hard-pressed to recover the run of form it saw a year ago.

“2015 was a really big year for Apple because of the release of the iPhone 6s, which drove replacement for iOS users en masse in all markets,” said Gupta.

“Can Apple repeat this with the iPhone 7? I think it will be difficult to recreate the interest it generated with the iPhone 6. I expect overall Apple will be flat or down this year.”

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Samsung retained its top spot and saw an increase in sales from 72.1 million this time last year to 76.7 in the second quarter of 2016, largely thanks to interest in its premium Galaxy S7 product, and its Galaxy A and J lines, which are helping it come back strong against Chinese manufacturers.

It was Chinese suppliers who filled out the top end of the league table, with Huawei, Oppo and Xiaomi rounding out the top five, all of them increasing sales and, in Oppo’s case, doubling them.

“Features such as an anti-shake camera optimised for selfies, and rapid charge technology, helped Oppo carve a niche market for itself and boost sales in a highly competitive and commoditised smartphone market,” noted Gupta.

The dominance of Samsung, and its Chinese competitors, helped propel Google’s Android mobile operating system (OS) to an 86.2% market share, up 4% on the second quarter of 2015.

Gartner’s Roberta Cozza said Google was evolving the Android platform very fast, which meant those building devices on its platform had more of an opportunity to remain at the cutting edge.

“Facing a highly commoditised smartphone market, Google’s focus is to further expand and diversify the Android platform with additional functionalities, such as virtual reality, enabling more-intelligent experiences and reach into wearables, connected home devices, in-car entertainment and TV,” she said.

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I'm sure the smartphone market is pretty well saturated, so of course sales are going to decline when that happens. But people will always want the newer phones when new models are released. 
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