Global Smartphone Trends
As smart phones grow in popularity, there are many major trends that will be impacting the market throughout the next five years. Developed markets are nearing market saturation, but there are also emerging markets, primarily in APAC. Fewer technological advances and no contract plans are causing consumers to upgrade their devices less due to the high cost of phones. Though technological advances are slowing, the trends that impact suppliers and carriers are continuing to be diverse.
Smartphone sales are declining, particularly in China, due to economic weakness paired with saturation in the major developed markets and lengthen upgrade cycles. Because of this, emerging manufacturers such as OnePlus, Oppo and Vivo are aiming to offer premium phones at value prices. There will continue to be an immense growth of the smartphone market in this region, especially China, Japan, India, South Korea, and Indonesia, with North America being a competitive market as well. Android is leading the market in these regions. Despite the preference for Android devices, emerging manufacturers are still growing quickly.
In addition to APAC, North America is also one of the more competitive markets in the world. This atmosphere is causing carriers to shift emphasis on retention instead of acquisition. Focus has also shifted to increasing the length of replacement cycles due to the increase of contract-free packages that encourage consumers to retain their device for longer periods of time. Even though wireless carriers are boosting competition with tempting data packages and better device financing, consumers are staying loyal to their current wireless carrier. Because of the decrease in smartphone sales, carriers are having to look at other sources of revenue such as connected cars, tablets, and Internet of Things (IoT) devices. IoT devices can connect to cars and to wearables that track vital signs as well. Although only 3% of the population own wearables and about 5% have access to a connected car, these areas will likely see in increase of popularity in the next few years. In addition to focusing on these sources of revenue, carriers are also focusing on LTE/4G and 5G networks to provide better connectivity. These networks are quickly catching up to Wi-Fi.
Though advancements in technology have seemed to hit a wall with smartphones, several advances are continuing to be made. Smartphone makers are continuing to upgrade cameras, sound and aesthetics and there is a lot of hype around OEM flagships. Because technological advancements are a major challenge for growth, necessary changes need to be implemented to their manufacturing and distributing processes.
MARKETING AND CUSTOMER SERVICE
Since technological advances are slowing in the smartphone industry, focus on marketing and customer service is paramount. Carriers are focusing on high quality phones for lower prices. The emerging manufacturers, particularly in China drive their sales using this method of competitively priced, high quality devices. Although developed brands have saturated the market, this upcoming trend of lower priced phones could end up hurting them. In the US, 43% of buyers claimed that pricing was the leading factor for making a purchase while 36% of people in Great Britain feel the same.
The upcoming manufacturers in China can attribute their impressive growth to sales in rural areas and small cities. Using celebrities in marketing and providing competition on specific features has helped them make a name for themselves among the major manufacturers. Sports endorsements also help drive marketing.
A few companies are trending away from the large store network. Companies like France's Free Mobile are trying to simplify phone buying by using customer service kiosks instead of a store front and employing customer service and marketing that is internet based. This approach bases their customer communications on messaging systems and mobile apps with very little human interaction.
Companies are increasing the services they offer to retain customers and get new ones. Since consumers like to keep their devices for longer, companies are focused on providing better phone repair services and protection measures. Subscription services are also becoming popular so companies are beginning to offer services such as music and video streaming. Also, on the horizon are partnerships with virtual assistant companies such as Google's Alexa and Amazon Echo. Keeping smartphones connected is a major selling point.
Overall, there are many upcoming trends in the smart phone industry. Major markets include APAC and North America, with several new Chinese brands coming into the markets. Because smartphone retention is at an all time-high, smartphone makers are working on connecting phones with fast Internet and access to IoT and virtual assistants. Self-serve kiosks and no contract plans are growing quickly although the market is saturated with already developed companies. Though smartphone technology may not be changing much over the next five years, customer support, new brands and services will be dynamic.