As new internet of things devices appear to enter the market almost daily, it would appear that consumers’ appetite for new tech is healthy. However, Gartner has predicted that this may not be the case when it comes to more traditional gadgets, with smartphone sales set for a significant fall.
According to Gartner, the worldwide shipment of these devices is set to drop by 3.7% in 2019, as consumers reach “a threshold for new technologies”.
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It has been widely reported that smartphone sales have begun to stall, after sales declined for the first time ever in 2018, falling 1.7% in the second quarter of 2019.
However, this is only set to get worse. Sales of smartphones are predicted to decline by 3.2% in 2019, which would be the worst decline the market has ever seen, with smartphone sales reaching a “tipping point”.
This is is not limited to smartphones. While global shipments of PCs shipments grew 1.5% in the second quarter of 2019, “unclear external economic issues” have led Gartner to predict that for the whole of 2019, shipments will be down 1.5% on 2018.
However, the consumer PC market is predicted to decline by 9.8% this year, reducing its share of the total market to less than 40%.
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By GlobalDataThis is set to continue over the next five years, with an increase in the lifetimes of consumer PCs leading to 10 million fewer device replacements through 2023. Business PCs are also predicted to decline by 3.9% in 2020 after three years of growth.
Why are smartphone sales slowing?
Since Apple first launched the iPhone in 2007, the pace of innovation in the smartphone market has been rapid, both in terms of power and design.
However, the pace of innovation in the smartphone market is now widely acknowledged to be slowing, with most models now adhering to a similar design, and any variations, such as folding screens, failing to take off as of yet.
According to Gartner the lifetimes of premium phones continue to extend through 2019, meaning while it was once the norm to upgrade smartphones every two years or less, users are now more willing to hold onto their devices, causing smartphone sales to decline.
With the rise of environmentally conscious consumers, and a growing awareness of the problem of e-waste, the speed at which consumers replace handsets appears to be slowing. Apple recently announcing its independent repair programme, making it easier for iPhone owners to repair rather than replace, and a growth in a “make-do-and-mend” attitude may be on the cards.
Ranjit Atwal, senior research director at Gartner believes that the attraction of new technology in these particular markets is falling:
“This is due to consumers holding onto their phones longer, given the limited attraction of new technology. Unless the devices provide significant new utility, efficiency or experiences, users do not necessarily want to upgrade their phones.”
When it comes to PCs, the technology enjoyed a brief increase in 2018, as sales grew for the first time in six years in the second quarter, however, quickly began to decline once more. Some have attributed this to a shortage in central processing units, particularly Intel‘s, while others have pointed to the US-China trade war, with many hardware components manufactured in China.
Similarly, tablet sales have also experienced a decline. In 2018, The Verge reported that sales of tablets had fallen for 15 quarters, dropping by 5m in the second quarter of 2018. According to TechCrunch, this could be due to the growth in larger smartphone screens, a lack of innovative features, or the fact that consumers tend to leave devices at home, meaning they are less likely to break or be replaced.
Atwal believes that PC and tablet manufacturers will have to rethink their business strategies to contend with “uncertainty”:
“There is no doubt the PC landscape is changing. The consumer PC market requires high-value products that can meet specific consumer tasks, such as gaming. Likewise, PC vendors are having to cope with uncertainty from potential tariffs and Brexit disruptions. Ultimately, they need to change their business models to one based on annual service income, rather than the peaks and troughs of capital spending.
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