The smartphone industry is maturing
The smartphone industry (FONE) seems to be maturing. Reports from several research companies suggest that global smartphone sales are slowing to declining. According to IDC Research, global smartphone shipments declined by 6.3% YoY (year-over-year) in 4Q17.
According to Gartner, overall smartphone shipments fell by 5.6% YoY in 4Q17 and rose by only 2.7% in 2017 after registering robust double-digit growth in the previous two years. Consumers seem to be put off by the lofty prices of Apple (AAPL) and Samsung (SSNLF) phones.
Consumers prefer refurbished smartphones
Instead, consumers are favoring refurbished smartphones, secondhand phones, or holding on to their old smartphones. As the graph above shows, smartphone users are upgrading their smartphones less often.
Premium smartphone makers believed that they could make up for the slowing unit sales growth by bumping up prices. However, it appears that new features are not enough to encourage consumers to buy smartphones at a much higher price tag.
Apple’s stock prices have been flat over the last few months, as slowing unit sales have worried investors. Meanwhile, Samsung’s stock prices on the Korean Stock Exchange have declined by nearly 10% in the last three months.