The global smartphone market is set for another year-long period of stagnation but should start showing signs of recovery by 2020, industry tracker Gartner reported Monday.
The current issue is neither new nor exclusive to smartphones, with Gartner estimating traditional PCs, ultrabooks, and tablets to all experience stagnation or a slight decline throughout 2019, a continuation of their last year's performance.
Whereas approximately 1.81 billion smartphones were shipped in 2018, that figure is set to drop to 1.8 billion this year, then rebound to approximately 1.82 billion in 2020, Gartner's analysts predict. The forecast isn't that of long-term recovery, with the same report placing contemporary handsets at slightly under 1.8 billion shipments in 2021.
Smartphones becoming too good to be replaced annually
The ultra-competitive state of the mobile segment that's been observable over the last several years led manufacturers to deliver devices with extremely thin profit margins that provide great value for money and are generally considered too good to warrant replacing after a year. That's naturally good news for consumers but bad news for stockholders counting on continued growth as the main driver of added value to their portfolios.
There's nothing the industry can truly do about that right now, save for mounting revolutionary propositions that break with many conventions in hopes of reanimating the market. That's precisely what foldable phones and those capable of communicating with the fifth generation of wireless networks are meant to achieve but with both technologies still being in highly experimental phases of development, it doesn't appear likely that they'll yield that kind of pull in the immediate future.
Foldable phones not becoming good fast enough
Then again, Gartner expects bendable smartphones to hit 30 million units by 2023, which should still be but a fraction of all available high-end mobile devices four years from now. About one in every twenty ultra-premium smartphones shipped in 2023 will be foldable, the industry tracker estimates, thus maintaining its rather modest outlook on the potential foldable handsets hold in the medium term.
In a sense, while the mobile industry as a whole became too good for its own good, foldable smartphones will have a different issue altogether, with Gartner expecting them to not be good enough soon enough to affect the global stagnation in the segment. Right now, the first generation of such devices features bendable display panels of dubious quality and price tags hovering around the $2,000 mark.
A time for change
The world's largest manufacturers unsurprisingly won't be sitting with their corporate arms crossed while the market fixes itself and are instead all trying to buck the trend and deliver unexpected growth to their investors. So far, only Samsung appears to have shown its hand in that regard; the firm revisited its ultra-premium offerings, the ones with the highest profit margins, and expanded on them with the addition of more affordable devices that are still part of its high-end portfolio. Well, one of them so far, at least – the Galaxy S10e.
However, insiders close to Samsung are now claiming the Galaxy Note 10 range is in for a similar treatment later this year and more lineups might follow, posing a major challenge to value-first brands such as Huawei's Honor and OnePlus.