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After relentless growth we're about to arrive at a plateauing smartphone market. I wish I could read insights from experts on what to expect in coming years in

After relentless growth we're about to arrive at a plateauing smartphone market. I wish I could read insights from experts on what to expect in coming years in smartphone market in light of similar markets which entered a no growth zone. Specifically what will happen to prices, market shares , unit sales, pace of innovation, competition, international growth, developer ecosystems. Anyone?

hugh4life 8y ago
Hopefully a plateauing of the smartphone market along with China starting to produce memory will start to bring memory prices down. And then manufacturers will consider adding 8-16GB of memory... and at that point I wonder if more people will just use their phone docked to a monitor as their PC if Apple/Google/Microsoft do a better job facilitating it.
- supertrope 8y ago
  I doubt they will inflate BOM by $100. Excessive RAM also hurts battery life.
  - seanmcdirmid 8y ago
    RAM and flash are different things. More of the latter won’t hurt battery life very much.
    - supertrope 8y ago
      I think parent poster is referring to DRAM. 8-16GB of NAND is low even for budget phones. Desktop-like docking implies the need for 64-bit worthy amounts of DRAM.
      - seanmcdirmid 8y ago
        Considering that even the iPhone X comes with 3GB of RAM (the 8 only has 2), the other way doesn’t make much sense either.
- pjc50 8y ago
  Not sure about that - the Microsoft phones do it really well bit it doesn't seem to have taken off. Only place it has is the Nintendo Switch.
ws6 8y ago
It is now a technique plateau, not marketing. Marketing is always wide open when new tech solved real problems and improved life quality.
rconti 8y ago
Certainly we're expecting sales to slow as smartphone sales plateau, but why is it happening in China first? Is it a leading indicator of slowing growth? After all, smartphone purchases are most decidedly discretionary.
- noir_lord 8y ago
  It's possible that the plateau already hit in other economies but was partially masked by people buying new phones because they want the shiny. Dropping half a months income for an incremental increase is very different to dropping 2-3mths.
- dv_dt 8y ago
  If there is a utility plateau (i.e. everyone who can justify needing one has one), then one might expect that areas with more disposable income would have more people able to keep purchasing for fashion reasons while nations with tighter margins might continue at more of a replacement rate.
- usrusr 8y ago
  > but why is it happening in China first? Countries where the 24 month subsidy cycle is dominant will have a lot more inertia that countries where they are rare. Also, China is home to the "cheap flagship" brands, so much of the middle range of the market will already buy close to the technological limit. In countries where the middle of the market is mostly held by the lesser offerings of more premium brands, upgrades to a higher price tier can effectively substitute technological progress (for a while): customers expect a faster phone after n years, and if the technology doesn't deliver many will be willing extend their price range. If it helps. For those who already had a "cheap flagship", it won't.
lnx01 8y ago
I'm no analyst - but I think we'll see a drop in price to drive demand along with a consequential decline in quality. Those 'high end', 'good bang for your buck' flagships will be even cheaper and even more cheaply made.
- lazerpants 8y ago
  I think you missed a couple of interesting items. I suspect there will be more feature competition: get ready for water resistant mid and low tier phones, and tons of competition to have the best in class camera in top and mid tier phones.
theandrewbailey 8y ago
Dig up articles from about 5 years ago talking about the "post PC era". Replace all the references to PCs with smartphones, and you should have a good idea about what's in store for a "Post smartphone era".
- diminish 8y ago
  Good idea but I see one big difference. In the post-PC era we have the smartphone as a sort of replacement for a lot stuff that a PC does ( communication, web, sharing, photos, apps. ). In the smartphone plateau we're maybe not in post-smartphone era as there's nothing yet to steal engagement from the smartphone ( watch, wearables, VR not yet..)
ethbro 8y ago
If you take these numbers as reliable, there's still plenty of room for penetration. https://en.m.wikipedia.org/wiki/List_of_countries_by_smartphone_penetration https://en.m.wikipedia.org/wiki/List_of_countries_by_smartph... The biggest barriers are probably creating *G infrastructure in countries which don't have it widely deployed, and raising per capital GDP so people can afford devices. If you're a Chinese OEM, you're prolly looking for volume increases over profit margin.
jpeg_hero 8y ago
Looking at the PC plateau. Dell would sell a $700 PC, and then next year when it should have cost $350, they didn't sell it for $350, they sold a different PC for $700. So "mainstream" handset prices wont go to zero, or $50 bucks. The market will probably establish a set of price points, and vendors will supply models to compete at those price points. Think "entry-level", "prosumer" "flagship"
ksec 8y ago
Apple, as this cycle happens, are now preparing to push up the price in the top end. Likely $949 for updated iPhone X, and $1099 for iPhone X Plus. Then the rumours, for a Mid Range iPhone, designed specifically with China in mind, starts at ~$700. Much like the economy that see a shrinking size of middle class, I think the market is going to two segment, sub ~$300 and ~$600+. Take for example, the average selling price of Xiaomi Smartphone is less then $130. That is from a company that has 10 - 15% of marketshare in China. My bet is that the top 4, representing 70%+ market shares are mostly concentrated in the sub ~$300 price group. Another point worth mentioning, there are 1.4 Billion people in China and only ~800M are Internet users, 90%+ of them through mobile. There is still another 600M to go, as they rapidly transform into a cashless society. The same to India.

hugh4life 8y ago

Hopefully a plateauing of the smartphone market along with China starting to produce memory will start to bring memory prices down. And then manufacturers will consider adding 8-16GB of memory... and at that point I wonder if more people will just use their phone docked to a monitor as their PC if Apple/Google/Microsoft do a better job facilitating it.

supertrope 8y ago
I doubt they will inflate BOM by $100. Excessive RAM also hurts battery life.
- seanmcdirmid 8y ago
  RAM and flash are different things. More of the latter won’t hurt battery life very much.
  - supertrope 8y ago
    I think parent poster is referring to DRAM. 8-16GB of NAND is low even for budget phones. Desktop-like docking implies the need for 64-bit worthy amounts of DRAM.
    - seanmcdirmid 8y ago
      Considering that even the iPhone X comes with 3GB of RAM (the 8 only has 2), the other way doesn’t make much sense either.
pjc50 8y ago
Not sure about that - the Microsoft phones do it really well bit it doesn't seem to have taken off. Only place it has is the Nintendo Switch.

ws6 8y ago

It is now a technique plateau, not marketing. Marketing is always wide open when new tech solved real problems and improved life quality.

rconti 8y ago

Certainly we're expecting sales to slow as smartphone sales plateau, but why is it happening in China first? Is it a leading indicator of slowing growth? After all, smartphone purchases are most decidedly discretionary.

noir_lord 8y ago
It's possible that the plateau already hit in other economies but was partially masked by people buying new phones because they want the shiny. Dropping half a months income for an incremental increase is very different to dropping 2-3mths.
dv_dt 8y ago
If there is a utility plateau (i.e. everyone who can justify needing one has one), then one might expect that areas with more disposable income would have more people able to keep purchasing for fashion reasons while nations with tighter margins might continue at more of a replacement rate.
usrusr 8y ago
> but why is it happening in China first? Countries where the 24 month subsidy cycle is dominant will have a lot more inertia that countries where they are rare. Also, China is home to the "cheap flagship" brands, so much of the middle range of the market will already buy close to the technological limit. In countries where the middle of the market is mostly held by the lesser offerings of more premium brands, upgrades to a higher price tier can effectively substitute technological progress (for a while): customers expect a faster phone after n years, and if the technology doesn't deliver many will be willing extend their price range. If it helps. For those who already had a "cheap flagship", it won't.

lnx01 8y ago

I'm no analyst - but I think we'll see a drop in price to drive demand along with a consequential decline in quality. Those 'high end', 'good bang for your buck' flagships will be even cheaper and even more cheaply made.

lazerpants 8y ago
I think you missed a couple of interesting items. I suspect there will be more feature competition: get ready for water resistant mid and low tier phones, and tons of competition to have the best in class camera in top and mid tier phones.

theandrewbailey 8y ago

Dig up articles from about 5 years ago talking about the "post PC era". Replace all the references to PCs with smartphones, and you should have a good idea about what's in store for a "Post smartphone era".

diminish 8y ago
Good idea but I see one big difference. In the post-PC era we have the smartphone as a sort of replacement for a lot stuff that a PC does ( communication, web, sharing, photos, apps. ). In the smartphone plateau we're maybe not in post-smartphone era as there's nothing yet to steal engagement from the smartphone ( watch, wearables, VR not yet..)

ethbro 8y ago

If you take these numbers as reliable, there's still plenty of room for penetration. https://en.m.wikipedia.org/wiki/List_of_countries_by_smartphone_penetration https://en.m.wikipedia.org/wiki/List_of_countries_by_smartph... The biggest barriers are probably creating *G infrastructure in countries which don't have it widely deployed, and raising per capital GDP so people can afford devices. If you're a Chinese OEM, you're prolly looking for volume increases over profit margin.

jpeg_hero 8y ago

Looking at the PC plateau. Dell would sell a $700 PC, and then next year when it should have cost $350, they didn't sell it for $350, they sold a different PC for $700. So "mainstream" handset prices wont go to zero, or $50 bucks. The market will probably establish a set of price points, and vendors will supply models to compete at those price points. Think "entry-level", "prosumer" "flagship"

ksec 8y ago

Apple, as this cycle happens, are now preparing to push up the price in the top end. Likely $949 for updated iPhone X, and $1099 for iPhone X Plus. Then the rumours, for a Mid Range iPhone, designed specifically with China in mind, starts at ~$700. Much like the economy that see a shrinking size of middle class, I think the market is going to two segment, sub ~$300 and ~$600+. Take for example, the average selling price of Xiaomi Smartphone is less then $130. That is from a company that has 10 - 15% of marketshare in China. My bet is that the top 4, representing 70%+ market shares are mostly concentrated in the sub ~$300 price group. Another point worth mentioning, there are 1.4 Billion people in China and only ~800M are Internet users, 90%+ of them through mobile. There is still another 600M to go, as they rapidly transform into a cashless society. The same to India.