Winner and loser of the week: suffocating smartphone market, breathing room for your budget

Winner and loser of the week: suffocating smartphone market, breathing room for your budget

There are scandals related to personal data, there's controversy around contact tracing, and the sales of smartphones are at half-mast... It's was a rather dull week that just ended in the technosphere.

For us journalists, it's always exciting to get ink flowing on a new crisis in the smartphone market or suspicions of data collection by a manufacturer (Cuckoo, Xiaomi), but it's also interesting to observe how a crisis can bring virtuous effects and change our consumption habits.

All is not lost for the tech players either, some manufacturers like Sony and Microsoft marked the week with nice announcements for new audio products. But these are only honorable mentions. The time has come for the final judgment, the one that designates the big losers and winners of the week.

Loser of the week: the smartphone market

While Huawei consolidated its strong position in the crisis-stricken Chinese market in the first quarter of 2020, things are looking bad for all manufacturers globally. According to a report by market research firm Strategy Analytics, the industry sold 275 million units worldwide, a 17 percent drop in sales compared to the same quarter last year (330.4 million units sold).

This is a major setback for the industry, largely due to the interruption of most of the production lines of the various manufacturers following the COVID-19 containment measures.

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Smartphone sales across the board are down 17 percent. / © NextPit

Only Xiaomi recorded positive results, or at least not negative ones, maintaining its sales volume in the first quarter of 2020 compared to 2019. However, the manufacturer cannot be this week's winner, after the scandal linked to the suspicion of collecting very personal data from its users via its web browser and mobile OS.

It's a situation that has already tarnished the reputation of almost every other major manufacturer before Xiaomi. It is even almost a "rite of passage" to becoming a big player on the market as my colleague, Eric, explained. According to him, "data protection scandals won't affect Xiaomi in the near future because the overall situation in the smartphone industry is hopeless anyway." You know you've made it when you become a data privacy scandal.

Winner of the week: consumer budgeting

A crisis can bring its share of virtuous effects. And the one affecting the smartphone market could have a positive impact on consumers. In a poll released last week, you were asked if the crisis related to the COVID-19 outbreak has disrupted your prospects of buying a new smartphone.

The majority of you (56 percent at the time of writing this article) said that you intend to keep your smartphone longer in the face of the current health situation. This is bad news for some, eager for new models. But it bodes well for others (like me) who see this as a possible moralization of our buying behavior.

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The rush to buy the latest flagship is fading away. / © NextPit

I explained this in a previous post about the death of the flagship concept. The permanent range shifts and the release of increasingly similar models prevent the consumer from making an informed choice when buying a new smartphone.

This crisis, which is leading to a drop in smartphone sales and purchases could, therefore, slow down the frantic race for new models. As users keep their respective smartphones longer, their wallets should also be able to breathe.

This is a particularly welcome trend at a time when the long months of confinement have caused many consumers to lose much of their purchasing power. We can also dream and hope for the standardization of marketing strategies on the part of manufacturers who could knock us out less often with three product launches per month.

I know it's optimistic, but who do you think is probably more down to earth? Who are your winners and losers this week? Let us know in the comments!

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  • Rusty H. May 12, 2020 Link to comment

    Good! About time these overpriced toys came down in price.
    1. LOTS of people had their hours cut, laid off or flat out lost their jobs
    2. People would rather spend their money on FOOD, housing etc.
    3. Consumers have been overpaying for these things, to remain "trendy"
    I for one hope the "hype" in more is better, will finally fade.

  • marco sarli
    • Admin
    May 11, 2020 Link to comment

    About time. To hope in constant expansion is not realistic and to drug the market with continuous new models, with just a couple of cosmetic changes and useless new features, has led to this situation. Now some producers will disappear and what is left will have to focus on substance and not appearance and stop increasing prices without offering anything.