Smartphone Demand Drops to 9-Year Low

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Smartphone demand has fallen just as Samsung launches is flagship Galaxy S8 and Apple Inc. (NASDAQ: AAPL) prepares for the release of its iPhone 8. As a matter for fact, demand has dropped to a nine-year low.

According to 451 Research:

Just 8.3% of respondents say they plan on buying a smartphone in the next 90 days – 2.7 points lower than the previous quarterly survey. Although the survey took place in March 2017, and there is typically a decline in purchase intentions each March, 451 Research analysts believe lengthening smartphone upgrade cycles and the lack of revolutionary new features are contributing to the low buying levels.

The iPhone 8 is expected to be released in September, although there are rumors that could be put off until later in the year. In the meantime, the short-term forecast is not good for Apple:

According to the survey, Apple remains the preferred manufacturer among planned smartphone buyers, with 38% saying they will purchase an iPhone over the next 90 days. However, this is a notable 16 points lower than the previous quarter and a combined 27-point drop over the past six months – a steeper decline than is typically seen two quarters after a new model release.

Samsung’s recovery, marked by the Galaxy S8, may yet affect the market:

Despite the weakened market, Samsung is seeing a seven-point increase over the previous quarter, with 22% of planned buyers saying they will purchase a Samsung smartphone in the next 90 days. Samsung is up a total of eight points over the past two surveys as it continues to recover from the Note 7 recall. The latest VoCUL survey was nearly complete at the time of the Galaxy S8 announcement, so the impact of the new model is not fully reflected in the findings.

Taken as a whole, however, the research is not good news. There has long been concern that people will not upgrade their smartphones as fast as in the past. Smartphones are already fully featured for most consumers. The next best thing does not bring them much they will find useful.

The sun may have started to set on the explosive growth of the smartphone market.

Methodology:

451 Research’s VoCUL Consumer Smartphones: 90-Day Outlook survey took place from March 14-31, 2017. The survey of 4,075 primarily North American consumers from 451 Research’s Leading Indicator panel looked at trends in the smartphone market among current owners and planned buyers, including customer satisfaction and OS preferences.