Internet Trends 2017: The End of Smartphones?

This is the first in a series focusing on data from Mary Meeker’s 2017 Internet Trends report.

After almost twenty years of smartphones, has the world had enough? Insights from the 2017 Internet Trends report show that global shipments of smartphones grew just three percent this year, compared to ten percent the previous year. Some are taking this as an indication that “everyone who wants or needs a smartphone now has one.” This begs the question: is it the beginning of the end for smartphones? And, if so, what does that mean?

First, it is worth noting that while there is global decline in smartphone shipping, areas like India and China are showing growth in sales. Still, North America and Europe, where smartphones are already heavily saturated, have witnessed a sharp drop-off.

The reason? Some point to carriers’ separation of device and plan charges. That is, once users pay off their smartphones via monthly installments, they are exempt from any additional charges. Saving $15-$40 monthly as a result of these deals, it is no wonder users are holding off on upgrading for newer models – for an average of 29 months, to be specific.

Another reason for the stagnation in sales, some assert, is that innovation is occurring outside of the smartphone market – particularly in the realm of voice and VR capabilities that allow consumers to perform the same functions as they would with a smartphone with greater ease.

Amazon’s Echo Show, for example, offers consumers the ability to perform actions like playing music or making notes for themselves with only their voice. While voice applications are present on smartphones, comprising 20% of mobile queries made in 2016, devices like Amazon’s Echo eliminate the screen altogether, relying solely on voice commands. What’s more, with Amazon’s Echo Show incorporating voice and video calls, the need for smartphones may waiver still.

The advent of VR/augmented reality gaming devices may also have contributed to smartphone shipments’ stagnation. After all, users are reportedly spending 43% of their time spent on mobile devices on gaming.

Despite these advancements, and regardless of the reason for the plateau in shipments, a movement away from smartphones will not be happening any time soon. Amazon’s devices, after all, are stationary, meant to remain in one place in the home, and most gaming devices currently do not offer other important smartphone features, like email, social networking, and music.

Smartphone usage statistics do, however, reveal opportunities for embedding more voice technology. Deloitte’s 2016 Global mobile consumer trends report found “across all of the countries, consumers are most commonly checking text messages and instant messages (IM) first thing every day.” In developed markets, 19% of consumers checked email first while, in emerging markets, social media came out on top, with 22% of consumers checking it first thing in the morning.

Isabelle Styslinger is a Research Analyst at CCIA. Follow @i_styslinger