It seems that the rapid growth smartphones — and by extension, Android — has enjoyed over the years is slowly but surely, grinding to a halt. A latest analysis by Gartner confirmed it, as a report on the year by year growth, indicated increase in sales this year to be the slowest, ever.
According to the report which focused on the second quarter, global smartphone sales to users added up to only 330 million units. The figures may sound impressive, relatively though, it means a growth of only 13.5 per cent on the units sold over the same period in 2014. While a 2 digit growth figure may bode great sailing for some businesses, for smartphones, its more of an indication of troubled waters and decreasing growth.
One of the main reasons behind this slow-down, according to the report, is saturation of the smartphone market in China — a country which accounts for nearly one-third of the global smartphone sales. Expounding the point, Gartner research director Anshul Gupta said,
China has reached saturation — its phone market is essentially driven by replacement, with fewer first-time buyers. Beyond the lower-end phone segment, the appeal of premium smartphones will be key for vendors to attract upgrades and to maintain or grow their market share in China.
Android, on the other hand has suffered even more in the wake of this saturation. While the smartphones growth has merely slowed, Android has also lost shares to Apple for the last three-quarters, thanks to the increased purchasing capability of the middle class as well as the fact that Apple devices have been lately getting a warmer reception in the region.
Globally too, while Android is still way ahead of its competitors with a 82% market share, Apple trumps it in terms of year over year growth, with 15 per cent of growth to show as compared to only 11% for Android.
Says Gupta in an interview with TechCrunch.
Commenting on Google’s drive with its Android One initiative to introduce more Android competition into emerging markets for consumer benefits ( as well as increased volumes in the long run) he adds,
The market is quite competitive and that’s the reason we haven’t seen any huge success coming in from Android One so far, Google is pushing the program because it ensures that the users in those emerging markets get access to latest phone with latest operating system, so they are bringing in more competition in the market which pushes vendors to go for similar kind of offering.
The Android v/s Apple trend was also apparent when individual OEMs were pitted against each other. Samsung, despite improvements in its Galaxy line-up recorder a decline of 5.3 per cent in unit sales. Apple on the other hand, wnt up 36 per cent leading to an increase of 2.4 percentage points in market share. In China, Apple’s performance was specially impressive and the company recorded a massive growth of 68 per cent, reaching a staggering (For Apple in China) 11.9 million units.
According to Anshul, this is thanks to the fact that iPhones have been associated with brand and status — more so in the eastern countries as compared to the US, where they are dime a dozen.
It’s a big brand and people really associate that with their status and it’s kind of an aspirational brand so many of the consumers in China expect to own an iPhone at some point of time. To some extent it has affected replacement sales for Android phones because Android users are holding onto their phones for a little longer in the hope of buying an iPhone… Someone actually told me in China there are two kinds of smartphone: one is the iPhone, another is ‘all the phones’.
And while the Chinese smartphone market as a whole may be on the verge of reaching its saturation point, the premium phones niche has no such qualms and still has plenty of room for expansion.
Apple sold roughly 7.5 million phones last quarter out of 102 million, or maybe 98 million, so that is closer to 8 to 9 per cent. Overall premium could be roughly around 20 per cent so that segment is still one-fifth of what the overall market is, so if that segment grows there are definitely more quantities for Apple.
While that is all well and good for Apple, rivals such as HTC and Samsung have suffered drastically as a consequence. But well, in the cut-throat competition that reigns over the phone market, it’s neither here nor there.
However, that doesn’t mean that all hope is over for Android. The low price variants offered by Android make it a favorite with those entering the world of smartphones, offering plenty of room to stretch. Also, new players such as Xiaomi, which went from not existing in India to becoming the number 5 smartphone seller — all in the space of a year — have proven the same point time and again, ‘If your goods are good, there are always people willing to buy them for you’.