According to a credible study, the smartphone market is said to have shrunk by 38 percent year-on-year for the month of February. Since it does not look as if the global economy and thus the living conditions of people will recover quickly, the market for luxury goods could soon undergo a fundamental change.
What if suddenly nobody is interested in the new iPhone anymore? What if the new OnePlus top model breaks all benchmark records and nobody cares? When two months later Xiaomi presents a smartphone with the same speed and power for less than $300, and even that sits gathering dust on store shelves?
The latest report from Strategy Analytics (via CNBC) suggests that smartphone manufacturers should now calculate such scenarios and counter them with new strategies. The reason is obvious: First SARS-CoV-2 paralyzed production in China. Now the purchasing power buyer markets of Europe and the USA are crashing.
While until January everyone could somehow afford a high-end smartphone, many employees and entrepreneurs will now have other worries. Probably by the end of the year, rent and daily basic services will then be more important than selfies with cool bokeh effects or mobile games running at maximum graphics.
Smartphones of all price ranges are affected
The statistics also show that people are not just buying cheaper smartphones. No, they just don't buy any smartphone. They just keep using their old ones. By the way, this is exactly how the German Environmental Aid, among others, has been telling us to do for years. So here is another example that the environment can perhaps finally breathe a sigh of relief from our all-consuming consumption.
Nearly 100 million smartphones were sold in February 2019, this year there were only 61.8 million. February was the month when Germans still went to carnival celebrations. A few days ago, Americans were still on spring break in Florida, dancing on the beach. So nobody expects Strategy Analytics to deliver significantly better figures in March or April.
..."the biggest fall of all time."
Strategy Analytics has been providing these figures since 2003. Not once have they ever seen such a fall before, Linda Sui told CNBC.
A disaster for the industry, the moment of truth for customers
The Chinese shutdown had paralyzed production in the critical months of January to March (when Samsung and Huawei typically produce their new top models en masse). These will now reach the store shelves too late and encounter enormously weakened purchasing power of the desired customers.
The shutdown, in turn, not only puts the brakes on consumption but also on service. Service devices brought to the Apple Store simply remain there without repair, and held hostage, until the store opens again one day, Heise reports. And since, with two exceptions, no manufacturer currently offers repairable smartphones, the owners of the major smartphones are now realizing that they have become paralyzed by their dependency.
Time to press the reset button
As millions of smartphone users and loyal consumers are forced to allocate their smartphone budget to more important expenses, they will be forced to work longer with their current device. With a little luck, many users will then come to one of the following conclusions:
- They do not need a new device every two years
- It should not be complicated/expensive/prohibited to repair your device
- Durable or serviceable smartphones are in short supply
It is true that, similar to other industries (see aviation), the impending crisis will lead to a further thinning of the smartphone market. But the remaining giant corporations may be joined by new companies with exciting concepts that can exploit the weaknesses of the established brands that are now becoming apparent. And perhaps the corresponding desire of the customers will finally become audible, perhaps also in the form of overdue indignation.