Consumers await 5G, pause on upgrade to smartphones: Gartner report

The trend for lengthening mobile phone life span began in 2018 and will continue through 2019 as consumers don’t see significant utility in upgrading phones at present, reports Gartner.

The report predicts that high-end phone lifespan will increase from 2.6 years to nearly 2.9 years through 2023. 

Telecom sector analysts note that without clarity on 5G connectivity, the consumer would want to hold spending on new devices.

Gartner estimates that sales of smartphones will decline by 2.5 per cent in 2019, which would be the worst decline ever. 

Worldwide shipment of devices – PCs, tablets and mobile phones – will total 2.2 billion units in 2019, a decline of 3.3 per cent year over year, according to Gartner, while mobile phones alone will see a fall of 3.8 per cent.

The current mobile phone market of 1.7 billion shipments is arou­nd 10 per cent lower than the 1.9 billion shipments reached in 2015. 

“If mobile phones don’t provide significant new utility, efficiency or experiences, users won’t upgrade them, and will consequently increase these devices’ life spans,” said Ranjit Atwal, research director at Gartner.

As for India’s performance, smartphone shipments in the country grew to 37 million units, a single-digit growth annually during Q2 of 2019, setting a second-quarter shipment record, according to the latest research from Counterpoint’s Market Monitor service. The growth was driven by launches, price cuts on older devices and channel expansion across brands.

“Localisation, branding, and innovation will remain key drivers for growth in a highly competitive market like India. The market will continue to become more concentrated with majority of shares controlled by a few brands leading to a greater number of exits among the long-tail brands in the market, moving forward,” said Anshika Jain, Research Analyst, Counterpoint Research. 

In India, the pricing sweet-spot for consumers has moved to the Rs  10,000-Rs 20,000 price band.

Even telecom operators in India, during their recent quarterly results, had noted that the pace of handset adoption is stagnating over the past few quarters due to higher handset prices and adverse currency fluctuations impacting the cost.

Earlier this year, mobile operators launched 5G services in parts of the US, South Korea, Switzerland, Finland and the UK, but it will take time for carriers to expand 5G coverage beyond major cities.