Smartphone, from standstill to new opportunities

Michele Caprini
16 Dec 2019

The smartphone industry has been a dominating market in this decade reaching the stage where there are more mobile subscriptions than people in the world (Ericsson mobility report, November 2019).

Degrowth

Two years ago, the global smartphone market came to a standstill due to  the worldwide adoption of smartphone devices. Global shipments of smartphones fell by 4% in 2018, and by the end of 2019 will certainly not go any better. Less than 1.4 billion new units are expected to be sold in 2019, according to IDC estimates: a 7% decrease from the 2016 peak. From the magic moment of 2010 (+ 75% on 2009) to the steadiness of the last two years.

The recovery seems to be very difficult now and should take place when 5G arrives. IDC predicts that 5G smartphones will account for 8.9% of global unit shipments in 2020 and nearly 30% of total shipments by 2023.  By that year, the industry may be able to replicate, or even exceed, the previous peak of 2016 (little less than 1.5 billion devices).

 

Mobile Italy

Our country, along with Spain, is the most mobile-friendly in Europe. 37% of online access is done through smartphone (Comscore, September 2019). More than twice than the USA and France and slightly more than the United Kingdom, the European country with the highest eCommerce trade.

Italiani.coop has recently published a survey on Italians usage habits of smartphones. The results are worrying in a sociological interpretation of the phenomenon as the average usage of smartphone is 5 hours per day. Men spend half an hour more than women on their devices, 18-35 years old are the main consumers (6 hours against 3.10 of 56-65 years old).

The trend is an increasing growth for voice calls and for text, audio and video messages. Daily, 98% of smartphone users text messages and 94% send voice messages.

Social commerce

Of course, this pervasive use of devices is very interesting for social commerce, as almost half of the world's population uses social media (Nielsen). And they do so for more than two hours/day on average. Thereby, they represent a potential virtual purchasing community for widespread and consolidated platforms. Facebook, YouTube, Snapchat, the Chinese digital ecosystem of WeChat, the new comers like TikTok. More than anyone Instagram, which sales "buttons" created new possibilities for companies.

After all, since 2014 the value of mobile commerce has risen from $50 billion to $700 billion. It was unlikely indeed that social media wouldn't be ready for direct online commerce. Since 2010, then, expenditure on digital advertising on smartphones and tablets has risen from 0 to 70%.

The smartphone, far more than the tablet, is the indispensable tool for the consolidation and expansion of digital commerce (recent data of Single's day and Black Friday are the greatest examples).

For retail, media, and gaming, any strategy of growth, engagement or maintenance cannot simply be achieved without leveraging the smartphone. Although there is no need to buy new ones, at least for now.

 

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