Smartphone replacement cycles seem to be lengthening. A Counterpoint Research study conducted in 2017 shows that, on average, people across the globe replaced their smartphones every 21 months. This is not the case anymore. Consumers seem to be holding on to their phones for 30 months (two-and-a-half years) and longer. While on one hand, the troubles that used to plague previous smartphones – battery life, deteriorating performance, phones that 'hang' often – are much lesser now, there are other factors that seem to be playing into the decision as well.
At a time when the world is bracing for economic and political uncertainty, coping with lower disposable incomes, amid a rising outcry against the increasing price points of smartphones, consumers across the globe have become more reluctant to invest in a new smartphone. In the first quarter of 2019, global smartphone sales dipped 2.7 percent, with the U.S. and China witnessing sales decline by 15.8 percent and 3.2 percent respectively, a recent Gartner research indicates.
Furthermore, consumers are also holding onto their present smartphones because hardware innovation seems to have plateaued. The differences between affordable devices and high-end flagships have narrowed to a point where nearly all fundamental functionalities from screen size and cameras to processing capabilities and applications are available across all smart devices. The slowdown of hardware innovation has played a huge role in the dip in smartphone sales.
"Smartphones are becoming commoditized in terms of hardware – a lot of the hardware across different smartphones and different price points are similar in terms of specifications. Innovation has slowed down in terms of hardware," said Sanmeet Kochhar, General Manager – Middle East, at HMD Global.
Average lifespan (replacement cycle length) of smartphones in the United States
What does the future hold?
Currently, hardware innovation seems to be moving laterally, and that's not doing the consumers any favors. The difference between one camera and five is not as evident as the difference between a camera and none at all. Moving to a 4K display does not seem as evident as moving from 480p to 1080p. While new foldable phones do beckon a new form of hardware, is the attraction of a bigger screen as novel as it is made out to be?
"While hardware innovation is slowing down, innovation is picking up in terms of software, and this is quite remarkable. Nokia, for instance, commits to providing the latest software security updates every single month. This means that software security on Nokia phones is the most cutting-edge in the market. Additionally, the brand also assures its consumers of continuous software updates across all its devices, whether its a 300 AED phone or a high-end flagship phone. When smartphone software is upgraded, the phone must become almost as good as new," Kochhar said.
A lot of smartphone processor chips now also come with dedicated Artificial Intelligence (AI) components. This means that "smartphones" are soon going to get a lot "smarter". One of the features touted includes AI-based adaptive batteries, which identify and learn how and why consumers use their phones in order to then prioritize which applications run in the background to, therefore, optimize power and processing speeds. The use of AI and machine learning in smartphones also hopes to redefine the way people engage with their smartphones, from the way the smartphone starts to features such as adaptive brightness, voice-based user interface and voice assistants, facial recognition, augmented reality, advanced security features, AI-based photography, automated digital image and video editing, monitoring health and fitness, and more!
"We need to get to a stage where people are buying phones because of a need to upgrade to a better and more innovative experience rather than because of an issue that they face with their phones. With 5G around the corner, augmented reality games and applications are interesting to look forward to," Kochhar added.
The incredible speeds and lower latency promised by 5G also creates a world of opportunities from mixed reality to holographic phone calls, lag-free live streaming, and a set of fascinating mobile applications that attempt to simplify various parts of a consumer's daily life. However, governments and telecommunication carriers are yet to deploy the new spectrum and infrastructure needed to reach the speeds that 5G promises.
All in all, the smartphone future does look bright with a software revolution in the making, and it won't be too long before people get back into the groove of eagerly awaiting the next smartphone release.