Today we ask is the smartphone future cloudy? After years of steady growth, we see some evidence of a slowdown in sales. Why? And what’s next are the focus of this post.
Before reading below, these posts illustrate the evolving status of smartphones:
- Smartphone Use Still Growing (2016)
- What Is Next for Smartphones (2018)
- Will Foldable Smartphones Be a Game Changer? (2019)
Smartphone Future Cloudy
In this post, we review the assessments of various sources. These assessments came out at roughly the same time as Apple introduced its new iPhones.
Apple Revenues Less Dependent on iPhones
“This year Apple is challenged with creating buzz in a declining smartphone market. Many expect that this year’s release will feature incremental changes, like a better camera, to its existing suite of devices.
“After the first iPhone’s launch in 2007, it took less than three years for it to become Apple’s most important product in terms of revenue. For the past five years, the iPhone has accounted for around 60 percent of the company’s net sales, with its importance peaking in Q1 2018 at 70 percent, shortly after the iPhone X was launched. In the past quarter, however, as iPhone sales dropped from $29.47 billion to $25.99 billion while Apple’s other segments all performed strongly, the iPhone’s share of total revenue dropped below 50 percent for the first time since 2012.”
New iPhone Pricing
“In a sign that Apple is paying attention to consumers who aren’t racing to buy more expensive phones, the company said the iPhone 11, its entry-level phone, would start at $700, compared with $750 for the comparable model last year. Apple kept the starting prices of its more advanced models, the iPhone 11 Pro and iPhone 11 Pro Max, at $1,000 and $1,100. The company unveiled the new phones at a 90-minute press event at its Silicon Valley campus.”
“The price cut on the iPhone 11 was unexpected because Apple had been raising prices each year as a way to keep revenues afloat while iPhone sales fell. But Apple might have hit the ceiling this past year. Sales of the two models that began at $1,000 or more lagged expectations, causing the company to cut revenue estimates and eventually slash prices in China to increase demand.”
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Initial Interest in New iPhones Flagging
“The largest share of respondents (28%) said that the single biggest factor behind their decision to not buy a new iPhone is that their current phone is good enough. Over one-fifth (22%) of respondents noted a lack of outstanding new features as the single biggest factor motivating their decision not to buy a new iPhone. Fifteen percent of respondents said the single biggest factor behind their decision to not buy the new iPhone this year is that the new iPhone price points are out of their range.”