The smartphone mania What’s the latest buzz?
With 81% of people now owning smartphones, Americans are certainly living completely digital lives. A look around at all the bowed heads and the constant buzzing is proof enough of our changing lifestyle. From socializing, information, entertainment, and work, the tiny device has become a one-stop solution for all our needs and wants.
Today, even smartphones are constantly evolving; getting bigger, slimmer, and a whole lot smarter. They are increasingly turning into sophisticated machines, masterpieces even, bringing the latest technologies to our fingertips. Given the horde of options, what smartphone brands are Americans hanging on to, and how are their preferences shaping the latest trends? Piplsay (powered by Market Cube) reached out to 70,000 smartphone users across the country, and this is what we found:
The smartphone market in the US is quite concentrated, with the top 3 brands- Apple, Samsung, and LG controlling the bulk of the total sales. With 4 out of 10 Americans owning iPhones, Apple continues to be the big daddy of the smartphone world, lauding over the others with a 41% market share*. Despite several options available in the market, including Chinese vendors like Huawei, Vivo, Honor, and One Plus, close to 90% of Americans seem to prefer sticking with their usual brand. This is not surprising, given that iPhone and Samsung have continued to dominate the market for years, with iPhone users especially displaying a degree of loyalty rarely enjoyed by other brands.
Despite the option of choosing from a wide range of smartphones, as well as the freedom to switch between networks, a vast majority of Americans still prefer buying their phones from network carriers like Verizon, T-Mobile, and AT&T. This is also a big reason why brands like Apple, Samsung, and LG witness huge sales. Chinese brands like Huawei and Xioami, that are fast dominating other world markets, are almost absent in the country on account of not being sold at these carrier stores. Carrier option continues to remain exciting because of the long-term payment plans, discounts, and trade-in offers they offer to potential buyers. Not forgetting the convenience of getting all the formalities done under one roof. No wonder then, that, a majority of Americans, especially youngsters, finance their phones instead of buying them outright. This financing clearly makes owning an $800 smartphone a real possibility. Still, close to 45% of Americans prefer spending less than $400 on their smartphone purchase, as revealed by the Piplsay survey.
But despite the smartphone rage, the market seems to be slowing down. While global smartphone shipments declined 6.6%, US shipments** were down 15% this year, with almost all top brands feeling the heat. The near-full market penetration has resulted in saturation, with upgrade cycles also becoming longer. That only 22% of Americans upgrade their smartphones every year proves this trend. One reason for this could be that new models today often come with only incremental changes, with no new generational technology on offer. This may not be enough of an incentive for most people to replace their phones, especially if their current phones are nearly as good. Additionally, with innovation mostly coming with a heavy price tag, average Americans may not feel excited about upgrading within their usual price range.
Nevertheless, these realities often end up giving low-cost providers like LG, Motorola, and HTC an opportunity to increase their market size. Overall, despite the current slowdown, the smartphone market in the US is set on a positive trajectory as more Americans switch from regular mobile phones to smartphones. The number of smartphone users in the US is expected to grow from 257.3 million in 2018 to 285.3 million in 2023, which underlines the huge scope and growth. The mainstreaming of 5G service will no doubt infuse fresh energy into the smartphone industry in the coming few months. In the long run, however, major redesigns and innovations like smart glasses, stretchable phones, etc. will be the factors that will cause the ultimate market disruption.
Source: *Counterpoint **IDC