Peak smartphone? Phone fatigue hits Western Europe hard

Smartmobe shipments were down almost 7 per cent year-on-year in Europe during calendar Q1, according to Canalys, as phone fatigue hit mature markets hard. Some 46 million units in total were shipped in the three months, this included a 13 per cent drop in Western Europe to 30.1 million phones and a 12.9 per cent rise in …

[Cavehomme_]

About time

Finally, enough people have woken up to what myself and many others have being doing for years - buy your own phone and keep it a few or even many years, or hand it down to the kids or else sell it on Ebay if you've got bored with it sooner.

On top of that, the market has matured massively and can't support rip-off merchants with 40% profit margins like Apple and wannabee rip-off merchants like Samsung with their S* series any longer.

Warren Buffet is not very smart IMHO investing even more of Berkshire's dosh into Apple. It's share price is going to nose-dive over the next few years, unless they spend their massive savings in buying their own shares back to artificially prop up the share price to keep Warren happy....then suddenly one day they'll run out money and crash and burn. Yes, it can really happen Mr / Ms / 'It' Millenial: been there, seen it, done it, etc...

In Apple's and Samsung's place the Chinese £100 phones such as the adequate Moto E4 and their Nokia and other equivalents built in China shall inherit the Earth on their 5% or lower profit margins.

Having a civilisation at least 5000 years old does have certain insights and other competitive advantages, I for one welcome our new Chinese overlords!

[Anonymous Coward]

Re: About time

A lot of people have gone broke over the years betting against what Buffett invested in.

[julian.smith]

Re: About time

I'm a big Buffett fan but his tech track record is patchy

From Forbes "Buffett's IBM investment was a disappointment. As of last May, he had lost about $800 million on IBM, according to Business Insider. Even if he broke even, he would have been better off in an S&P 500 index fund -- which has risen 138% since his purchase inSeptember 2011."

[Tezfair]

1st phone in 4+ years

I decided to retire out my faithful oneplus one last week for a Samsung S9+. Reasons were due to the screen, battery life and some VoIP compatibility issues with bluetooth. It's been bl**dy fantasic mobile. The last phone before that was an S4 which I had for several years on contract (my lads got that now)

I don't need to replace a phone until I have to as the quality has improved over the years and there's very few bells and whistles that I can't live without.

A beer for my old mobile

[Anonymous Coward]

Re: 1st phone in 4+ years

Me too --- I always used to buy 2 models back on eBay and stick to SIMS, usually PAYG but occasionally one can get a good contract (btw I once spoke to a saleswoman at Three who told me her name was "Simone Leigh").

This time I bought the new Sony XZ2 which I love. I haven't paid over 200 for a phone in years but the 650 I spent on this one got me a free PSVR (which I was going to buy anyway) so it's not quite as expensive as it looks.

[Schultz]

Re: 1st phone in 4+ years

Still holding out on an ancient S3. Even better, I replaced the cracked screen with the one from the broken S3 my wife discarded several years ago (the kids dug that up from under the sofa). That took a screwdriver and mere 20 minutes. A factory reset magically removed all lags and the only real limitation is the small internal memory. So I don't try to run 4 different browsers, 5 mapping apps, and all the Facebook clones.

Every now and then I look at the shiny things around me and decide there is still time. The only pressing reason I see for an update would be to run games (that's what got me the cracked screen - thanks, kids).

[onefang]

Re: 1st phone in 4+ years

"Still holding out on an ancient S3."

Alas my ancient S3 died last year, to be replaced by a Moto Z. I currently have no plans to replace that until it dies.

[Anonymous Coward]

Re: 1st phone in 4+ years

I replaced my 7 year old Galaxy S2 last month.

It still works well with LineageOs Nougat, but the volume up button failed after dismantling to replace the camera cover. Therfore, I'm unable to boot into recovery mode if it 'bricks' during a ROM update, hence it's now a spare/beach/pub phone.

I searched high and low to find a similar sized phone with removable battery, custom ROM support, good reviews, and all for under £150. The Moto G5 fits my needs perfectly.

Sad to see my S2 sat on the shelf though.

[Valeyard]

If it works...

My phone was a oneplus one preordered for just over 200 quid 4 years ago, still in use now. The opo 6 is coming out and so far all mine has needed is lineageos for regular security updates.

Hardware is still nicely on-spec, battery will still go a full day, updates weekly with lineage, hits my use case fine.

If it ever dies i can get a 2nd hand one from a few generations later for peanuts and it'll still seem new and blingy to me

Remember the value of money, the cost of waste, and take care of your equipment

And now I'm away to watch my 8 year old tv

[Anonymous Coward]

Why can I not...

Just buy a factory new version of my old phone? I just want the sockets (headphone jack!), removable battery, and a screen that is neither curved in any direction (corners or edges) and that does not have a notch(!).

Is that too much to ask?

[Commswonk]

Re: Why can I not...

Is that too much to ask?

Yes, I regret to say.

[intrigid]

Re: Why can I not...

I just purchased a factory-new Galaxy S5 just a couple of weeks ago, for the exact reasons you listed. I was afraid the horsepower and memory would be too far behind the times to make it a pleasurable experience, but I turned out to be delightfully wrong about that.

You could have slapped the S5 innards in the form factor of the S9, given it to me for free, and I would have legitimately believed that I was using the newest available phone.

[DiViDeD]

Re: Why can I not...

"a screen that is neither curved in any direction"

Very much this. My new S9+ has the curvy edge, which means that, when reading a web page, the extreme left and right edges of the text curve away from the reader, making it harder to read anything. And don't even think of trying to read a book!

Upshot being, I use my tablet for mobile reading, so I now carry 2 devices everywhere.

I'm sure that cat videos and pictures show up beautifully on the S9 screen, for the new tl;dr generation, but as a device for displaying text, it is, as we scientists say, fucking useless.

[trevorde]

Re: Why can I not...

Don't forget the micro SD card slot

[DiViDeD]

Re: Don't forget the micro SD card slot

Absolutely. Because balancing TWO fingernail sized cards on a thin wire frame while attempting to insert the whole assembly into a slot on the side of a super thin phone without dislodging either card so that the entire thing wedges itself in the slot has always been a favourite pastime of mine.

[JohnFen]

I don't live in western Europe

But after looking at the current smartphone offerings and the direction that the industry is clearly trying to go, I've decided that when I replace my current smartphone, it won't be with anything on the market or likely to be on the market in the foreseeable future.

[AMBxx]

Re: I don't live in western Europe

>>> won't be with anything on the market or likely to be on the market in the foreseeable future.

I'm waiting for the next Windows phone too!

[JohnFen]

Re: I don't live in western Europe

Nah, Windows Phones wouldn't cut it either. As near as I can tell (although I'm still looking), there is no smartphone on the market that does everything I want it to do anymore. That said, I'm halfway through designing my own. I think that's going to be my next smartphone. It will be about the same size as current flagships (although about twice as thick -- but paper-thin phone isn't on my wishlist, so that's not a big deal). It also won't run Android. It will run straight Linux. My current estimate is that it will cost about $400 in parts.

[ashdav]

Oldy but Goody

I'm still on my Samsung S2/original battery/custom ROM.

Works fine.

[Waseem Alkurdi]

Re: Oldy but Goody

It serves its purpose fully as a ARMv7 pocket computer that can handle phone calls and mobile data.

(But seriously, don't you find any use for a proper camera and 4G? This pair is what's getting me to abandon my 4yo midrange Galaxy Grand 2!)

[JohnFen]

Re: Oldy but Goody

"don't you find any use for a proper camera"

The camera is the most optional part of any smartphone for me. It's nice to be able to take a quick pic every so often, but not necessary, and I certainly don't need it to be a high quality pic.

[Neil Barnes]

Re: Oldy but Goody

"don't you find any use for a proper camera"

As above. I have a proper camera; it produces a negative 4 by 5 inches across. The phone is probably the worst possible format for a camera; an ergonomic nightmare.

But of course, others' opinions probably differ.

[Anonymous Coward]

Re: Oldy but Goody

Power to you but for most users these days, the camera is the most important feature of a phone (or at least top 3: if you consider display and battery life).

Many youngsters are selfie whores, and upload plenty of pictures and videos to social media sites. Video chats are also common. A subpar camera is annoying.

[JohnFen]

Re: Oldy but Goody

But Waseem Alkurdi wasn't asking about what most users want, he was asking about what ashdav wants.

[Chris G]

Re: Oldy but Goody

I agree that the picture quality of phone cameras is getting better but without having a much bigger phone

'a proper camera is unlikely on a phone. With the tiny sensors that phones have pixel count just means more work for the processing engine to do to cancel out noise and other problems. A micro 4/3 is just about a proper camera anything less is possibly OK if the quality is high enough.

I'm curious to know if there are numbers for phones bought via say Aliexpress or the other Chinese sellers or even ebay and Amazon, I ask because a lot of people in Europe are now buying Chinese phones direct, saving a lot of money for increased functionality over the offerings from most providers.

It may be that boxes are shifting but not through the conventional markets.

[Gene Cash]

Re: Oldy but Goody

> the camera is the most important feature of a phone

Well, it's important to me since it's usually the only camera I have with me, but if I don't have a headphone jack, then the phone is useless for GPS navigation on my bike, as I need earphones to hear the directions, and the Bluetooth shit always has a dead battery.

So "no headphone jack" is a simple non-starter.

[Anonymous Coward]

Re: Oldy but Goody

what does it matter that the phone camera is "subpar"? As far as I can see, my kids never look at those snaps they took anyway. I guess the phone might have just a mockup camera, id' still server the purpose (instant gratification, never look back :)

[Mr Han]

Re: Oldy but Goody

The camera is the most optional part of any smartphone for me

Me too. I survived many years without the need to carry a camera everywhere I go, so for me a good camera is a 'nice to have'. Also. 2G, 3G and wi-fi meet my needs.

Removable battery is my number one priority.

[Boris the Cockroach]

Re: Oldy but Goody

My old S2 still works... and I'd prefer it too.

Ok the battery is a bit knacked, but the killing feature is the phone only charges with one cable because the socket is worn out...

Hence a galaxy J3 replaced it because thats the smallest smart phone I could find.

And if it lasts 5 yrs like the last one I'll be happy

[Bad Beaver]

Nokia delivers

Nice looks, decent specs, clean OS, good price – apparently, that sells. Most of their phones also come with a headphone jack, which people seem to like, me included. Ok, they now have a flagship without one for the demographic that likes to spend more for less features. We'll see about how well that sells.

[Anonymous Coward]

Re: Nokia delivers

Glad to see the revival of Nokia under HMD Global. As Samsung is the entrenched king of the Android phone market share now, Nokia can only hope to snatch market share from the likes of LG, HTC, Sony, Huawei etc.

Trojan Horse Elop certainly wasted a few of Nokia's precious years with Windows phones. If I remember correctly, as a parting shot and a final insult to injury, Nokia was even forced to make a Windows RT tablet. That was a far more humiliating moment than the N-Gage.

[Anonymous Coward]

Re: Nokia delivers

"As Samsung is the entrenched king of the Android phone market share now, Nokia can only hope to snatch market share from the likes of LG, HTC, Sony, Huawei etc."

I fail to follow the logic. Surely it's easier to take sales from the company with the biggest sales volume? Assume Sony have 1% of the market and Samsung have 40% (I don't know if this is anywhere near right but it's an illustration).

To gain 1% of market share you have to persuade every Sony buyer to buy your product, or one Samsung buyer in 40. The 1% who still buy Sony probably have a reason for doing so, beyond just being contrarian. A lot of the Samsung buyers may simply have window shopped.

[Anonymous Coward]

Re: Nokia delivers

Samsung has a fairly large and loyal fanbase. Once they buy a Samsung, it is highly likely they will continue to do so. The others, less so. Maybe except for Sony, but its market share is statistically insignificant now.

Samsung is spending a crapton of money on aggressive marketing and R&D... it is impossible for Nokia (HMD Global), a smaller outfit with a more modest budget, to tackle it head on so early.

Nokia has had impeccable brand loyalty during the Symbian days. If Nokia plays its cards right, that will come back during its Android era.

[TomG]

Re: Nokia delivers

Have two Windows phones and they work great. Would/will buy another if they are still available when I get ready. I plan on using the current phones as long as possible.

[TomG]

Re: Nokia delivers

My Windows phones are great.

[fidodogbreath]

But if the problem is a slower purchase cycle, then the top-tier vendors risk making things worse by making their flagships ever more expensive. It simply prompts many to defer a purchase. Call it a “runaway contagion”, if you like.

In a mature market, YOY volume growth is not always sustainable.

PCs have seen a similar drop in sales volume, but IMHO mostly due to the fact that older PCs are still plenty good enough for a lot of common tasks. It's not like the early days, when a 2-year-old PC would struggle to run current software -- a Sandy Bridge Core i5 box with an SSD will still run MS Office and a web browser quite well, thankyouverymuch. For the non-enthusiast, there's no particular benefit to replacing an appliance that still does what you need.

I think we're seeing a similar phenomenon with phones. I know lots of people (myself included) who are still using phones from the Galaxy S6 / iPhone 6s era or older. As long as the one you have does the job reasonably well, why spend the cash and go through the disruption of changing devices until you have to?

Ironically, that phenomenon could drive prices up, not down. From the user perspective, it's easier to justify spending the extra cash for a premium phone that you'll keep for 2-3 years. From a manufacturer perspective, if they're only going to sell you a phone every 2-3 years then it's in their interest to have premium products that will capture as much revenue as possible from less-frequent sales.

We already see this focus on higher margin and trade-up customers with Google and Apple (and Sammy, to a lesser degree). They're happy to skim off the cream, and let the 2nd-tier manufacturers grind out low-margin devices for the price-sensitive.

[JohnFen]

" I know lots of people (myself included) who are still using phones from the Galaxy S6 / iPhone 6s era or older."

I'm still using a Galaxy S4 that I bought, what, five years ago?

It still works great, and newer models do not offer any substantial improvement on it (and they tend to offer a few substantial downsides).

[Whitter]

slower purchase cycle -> expensive flagship risk

Compare and contrast snippets from the article: the data seems entirely at odds with the conclusion.

"Recent Apple earnings indicate that higher prices have compensated for fewer iPhone Xs sold. Samsung too is seeing the financial benefits of higher prices... the value of its shipments has risen 20 per cent."

Followed by

"if the problem is a slower purchase cycle, then the top-tier vendors risk making things worse by making their flagships ever more expensive. It simply prompts many to defer a purchase."

[89724605708769278590284I9405670349743096734346773478647852349863592355648544996313855148583659264921]

Expandable RAM please!

...they keep on about modular designs but a simple way of expanding RAM would be bloody wonderful: that's the only issue I have with my 6 year old Android, OS is up to date but no room for new.

[Mr Han]

Re: Expandable RAM please!

I had the same problem. I had to repit (reparition) my S2 to install Nougat. It took me several attempts and a bricked phone (which I managed to recover from) before I coukd install Nougat.

[intrigid]

Peak smartphone quality is well behind us

Phone design reached peak quality several years ago. Now it's on the downswing. At some point in a major product (or industry's) lifespan, it reaches a point where the the remaining room for improvement represents a smaller psychological difference to the consumer than the psychological cost of paying for said improvement, which represents a hard brick wall for the producers.

At that point, the producer is faced with two choices:

1) Bring the innovation phase to a close, begin scaling back production, and prepare for the long-term sustenance phase of the product, which focuses on competitive pricing, marginal improvements, and cultivating a reputation for product quality.

2) Start introducing vast changes to the product that result in a net decrease, rather than increase in the value of the product. Exploit the fact that consumers tend to falsely assume that differences in newer versions of products must be improvements, or otherwise they wouldn't be made. This creates an artificial psychological benefit in the minds of consumers, motivating them to pay more for a newer but overall inferior product.

In my observation, most industries that encounter this crossroad choose to go down path #2 for a number of years, until a disruptive competitor eventually comes along and undoes most of the damage done in path 2, and establishes itself as a long term player by following path 1.

[fidodogbreath]

Re: Peak smartphone quality is well behind us

until a disruptive competitor eventually comes along and undoes most of the damage done in path 2, and establishes itself as a long term player by following path 1

Or creates an entirely new product class, starting the innovation phase anew.

[LenG]

No OS upgrades

The only reason I finally upgraded my old HTC was that I never got any OS upgrades and I couldn't find a reliable/safe way to root it and use an alternative (computer literate but phone dumb, me). So I bought a pixel 2 because I figured if that didn't get upgraded regularly nothing would.

So far so good.

[DiViDeD]

My first 'proper' smartphone, a Dell Streak, was, at the time, considered ludicrously large, at 5". It took VGA video and had a multiscreen sliding panoramic wallpaper. It ran Android éclair.

A month or so after getting it, it was updated with Android Froyo. Suddenly my VGA video camera was HD (well, 720p, anyway), there was a new look and new apps and everything was brighter and sharper.

I moved to the original Galaxy Note, and had a sharper screen and stylus capabilities. ICS brought more new features.

Next came an S5. Not much to say, except I loved the flip cover with a touchscreen window.

Then the S6 - more of the same

S9+ - slightly better camera and bloody curved edges to the screen. Slightly better screen resolution which is wasted because you couldn't see the pixels on the S6, or even on the S5, unless you held it to your nose.

Point is, the excitement of a new model/Android version was always new features, better and faster hardware (faster as in you actually *noticed* it was faster)

The excitement of having a phone which is almost identical to your old phone just isn't the same. What were exciting and compelling reasons to upgrade are simply not there anymore. It's exemplified by Apple, with their frozen in time iPhones, but obvious among Android and Windows phones too.

Our mobiles have nothing new to offer, just the bragging rights of 'Oh, you have an S8, well mine is an S9', even when they look exactly alike. The market and product have matured. Just like PCs, when each new CPU or OS offered amazing speed and performance hikes there was a compelling desire to upgrade. But for most people, their PC became fast enough and feature packed enough 5-10 years ago. Same with phones. Phone companies need to accept that they have entered the period of 'replacement only' rather than 'must have'.

[onefang]

"Slightly better screen resolution which is wasted because you couldn't see the pixels on the S6, or even on the S5, unless you held it to your nose."

Not wasted if you slip it into a VR headset. Though basically that's holding it to your nose and looking at the screen through lenses.

[Headwesty]

Why would anyone buy a phone on a contract?

OK perhaps I'm tight but I've been buying nearly-new phones from eBay and running them SIM-only since my K-JAM in 2005. A few minutes with a fag packet tells you that buying a phone on a contract is a rip-off. I've had my current Sony Z1 Compact for four years - it's only on its third battery/back panel and fourth tempered glass screen protector...

(but I do miss the K-JAM keyboard...)

[Terry 6]

Re: Why would anyone buy a phone on a contract?

Contract phones are often a double rip-off. Buyers are paying the top-whack price, but then when the phone is paid for (loan amortised in effect)most contract prices don't go down, so they carry on paying the same amount each month, paying for the phone again.

[Anonymous Coward]

"higher prices have compensated for fewer iPhone Xs sold"

Really? I though they were using the X to prove/trial new technology and never expected it to sell in high volumes? Doesn't the upturn in sales of "old" models also help with profitability? They are likely to have much higher profit margins.

I think a lot of this also comes down to what was acknowledged when Apple released the first iPhone - the market would saturate at some point.

The generally quality of phones these days is high, so they do last a long time (6 years before I replaced my last one, no used by the kids). Can't remember how may SIM changes that had, but I've not bought a phone on a contract for over 10 years now.

[Anonymous Coward]

Old vs new models

Still using an old LG G3...still working fine, nice big screen...only thing is that it sometimes keep me waiting if I need to start up an app or browse for something. But hey, I can make phone calls, send text messages, take nice pictures and listen to music....is pretty much everything what I need a smartphone for.

I bought it new but when it already was an older model, like 2 years out or something.

How many people I know that have the newest iPhone or Samsung but hardly using the phone for things other than making phone calls, texting and doing an occasional web search?

The iPhone people mostly with their nice cracked screens. Funny thing is that I have already associated iPhone with cracked screens...I think like 90% of people with iPhones must have a cracked screen, right? But hey, they have the newest, nicest and most expensive iPhone you know, with the best screen to see videos and all....with very wide cracks running all over it in all directions. :-D

Mostly they're the ones buying iPhones because 'their the best', but are completely baffled when they see 'any' mid- to toprange android phone and the quality they mostly offer.

That's why you see more and more people buying Huawei and OnePlus : top-notch features for a comparably cheap price.

[Anonymous Coward]

Elks' hooves?!

There are no elk in Finland.

What you heard were moose!

[Captain Hogwash]

Re: Elks' hooves?!

Moose in North America, Elk in Europe.

[tiggity]

Re: Elks' hooves?!

So long as you did not see any moose knuckles, all good.