Worldwide Smartphone Sales Headed For Decrease This Year

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Worldwide smartphone sales will fall to 1.5 billion units for 2019, a 2.5-percent decline over 2018 according to analyst firm Gartner. Japan, Western Europe, and North America hold the largest declines in sales, with 6.5-percent, 5.3-percent, and 4.4-percent sales declines respectively. Other declines came from Eastern Europe, Emerging Asia/Pacific, Greater China, and Latin America.

"Lengthening smartphone replacement cycles and a ban on Huawei accessing technology from U.S.-based suppliers weakened demand for smartphones in the first half of 2019. We expect demand to get even weaker in the second half as replacement of high-, low- and mid-end smartphones continues to slow, due to low value benefits," said Gartner research vice president Annette Zimmermann.

Smartphone replacement cycles have been lengthening for years now, seeing that Android OEMs are offering few new features consumers deem upgrade-worthy. Financial recession has hit in various places, with consumers losing jobs and income. In situations of financial decline, consumers are hesitant to purchase new smartphones because they cannot afford them.

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In other cases, consumers see little reason to upgrade because "this year's phone is like last year's phone," they say. This tends to be a big reason for small user bases with a number of Android OEMs who offer Google's Android to users and little more, that maintain a "vanilla Android" experience with few new apps apart from Google's very own offerings.

Some say vanilla Android is "as Android should be," but perhaps this vanilla approach is a turnoff to some customers who don't need to upgrade their vanilla Android phone when the one in their pocket will do just fine.

One of the major factors in global smartphone decline is the new political US-China Trade War and Huawei's ban from accessing technology through American manufacturers. Without needed components such as silicon chips, antennas, batteries, and so on, smartphones are impossible to make. Huawei's ban has prevented it from acquiring those mobile device components from companies such as Intel, Qualcomm, and Micron, forcing Huawei to make few smartphones that Europeans want to buy.

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Outside of China, Europe is Huawei's largest global market. It is this same large global market that stopped purchasing Huawei smartphones during the ban. It is said that Huawei has seen a 40-60-percent smartphone sales decline in Europe, particularly in Germany and Spain. Europeans love Android, making it hard for Huawei to sell smartphones without Android.

Even now that US President Donald Trump and Chinese President Xi Jinping have resumed trade negotiation talks, Trump is allowing American businesses to sell to Huawei and approving new selling licenses against ban protocol, but few know what items are a matter of national security and which items cannot be sold to Huawei.

There is no standard guideline regarding what products affect national security. As it has been said elsewhere, it seems as though the current administration is just making up political strategy as it goes along.

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One of the talks at the upcoming Shanghai meeting between Trump and Jinping is likely to pertain to China's lackluster investment in US agriculture, an emphasis at the two presidents' G20 summit talks in Osaka Japan weeks ago.

It has been said that Samsung is one of the Android OEMs that stands to gain from the Huawei Ban, but, in reality, some diehard Huawei loyalists have not purchased phones from other OEMs but have simply stopped purchasing new smartphones.

One trend that will see smartphone sales back on the uptake is 5G, as carriers continue deploying their 5G networks for next-generation wireless.

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"Although leading mobile manufacturers have started positioning their first 5G smartphones (such as the LG V50 ThinQ, OPPO Reno 5G, Samsung Galaxy S10 5G and Xiaomi Mi Mix 3 5G), and CSPs have started to offer some aggressively priced 5G service packages, 5G smartphone sales are set to remain small in 2019. Sales will start to ramp up in the second half of 2020 as the coverage and availability of 5G hardware services improve," Zimmermann said.

5G wireless will move consumers to upgrade in order to have blazing-fast internet data and data speeds. Customers in developed city areas will be the first to upgrade, and rural customers will upgrade in a few years as network deployments finally reach rural areas.

The US stands as one of the worst countries when it comes to offering data packages at affordable prices. Since only high-band and low-band spectrum exists here in the US (only Sprint has mid-band spectrum here), US carriers don't seem all that generous with their data amounts and plan prices. Sprint, of the four top US carriers, has been the most generous with its pricing, but Verizon, who owns at least eight times the spectrum of most other US carriers, charges up to $4 per GB for its data plans yet offers very little in the way of mobile hotspot data.

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With Europe, for example, Huawei's ban is likely one of the major reasons for smartphone recession there. Considering that a number of international carriers offer excellent data plans and service packages, customers need only buy flagship smartphones to access 5G networks.