What’s Next for the Smartphone Industry

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It was an incredible decade for smartphones, but 2016 will be recorded in history as the year when the smartphone market stopped growing. Sales dropped 2% across the markets tracked by Kantar Worldpanel ComTech – including the US, Great Britain, Germany, France, Italy, Spain, China, Australia, and Japan. As the industry matures, fewer consumers are moving between brands and ecosystems, and vendors are turning to selling more frequent upgrades and replacing existing devices, rather than connecting with large numbers of new buyers. 

In a new report available from Kantar Worldpanel ComTech, Global Consumer Insight Director Lauren Guenveur describes a fundamental shift in how carriers and manufacturers are now marketing devices and services to potential customers. Some of their new tactics include:

• Recognizing and responding to changing buying behavior and enticing consumers to purchase device upgrades more frequently
• Drawing buyers to new technologies that enhance the smartphone experience
• Offering consumers a more complete user experience, which includes the combining of compelling services and content with smartphones

Wearables were expected to be the next big mobile technology, promising to expand the smartphone ecosystem to the wrist. However, judging from disappointing sales results, vendors were more excited by the potential than consumers.

Virtual reality (VR), augmented reality (AR), a growing importance of artificial intelligence (AI), and virtual assistants may help stimulate market growth. But without more compelling applications for these technologies, they may end up being more hype than substance.

This report also offers guidance on how the industry can address flattening margins, consumer perceptions about widespread uniformity of competitive product offerings, and a need to introduce higher-spec products at mid-tier price points.

If mobile ecosystem manufacturers want to preserve the global brands they have worked so hard to build, they must trail blaze new, innovative offerings, and nurture fertile, new partnerships.