The trend: Three years into the adoption of 5G, we’re seeing some seismic shifts in the smartphone market. Apple’s iPhones surpassed OEMs making up Google’s Android ecosystem in the US, and service ecosystems like streaming music, fitness, and gaming subscriptions expanded around handsets.
Premium handsets continue to be in high demand, evidenced by shortages of the iPhone 14 Pro heading into the holiday season.
North American smartphone market could see continued decline: High inflation and a shrinking number of smartphone players could result in less consumer choice and a downward trend in smartphone adoption.
People are holding on to aging smartphones longer and are less inclined to buy upgraded models with higher price tags.
Yes, but: A couple of variables could entice upgrades: Various networks shuttering older 3G networks, as well as the proliferation of more-affordable mobile virtual network operators (MVNOs), could propel the wider adoption of 5G handsets.
Smartphone innovation has plateaued: Today’s smartphones are all very similar in terms of features and capabilities. Processors are increasingly more powerful and battery life is consistent, leaving manufacturers to innovate in camera performance and display technology.
Regulating the smartphone duopoly: A decade ago, Apple’s iOS and Google’s Android were already dominant, but the market had other options, including Nokia, BlackBerry, Windows Phone, and Palm OS. Similarly, phone makers like LG, HTC, and Huawei were in the picture.
The key takeaway: The smartphone market is becoming less about handsets and more about their services ecosystems. For example, Apple took a hit this year by not raising iPhone 14 prices and planned to make up costs through its long-term subscriptions play.
Services like fitness, music streaming, video streaming, game subscriptions, and iCloud don’t just increase customer lock-in, they can provide recurring revenue as bundled solutions consumers are dependent on.
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