Many of those who have undergone physical social estrangement and isolation at home may agree that smartphones have become key tools in this time of pandemic. Thanks to these devices it has been possible to maintain communication and access other key activities that have been promoted in these months, such as the consumption of content via streaming, online purchases and the use of social networks.
However, with everything and the relevance they have gained from users, it is possible to say that the smartphone industry is not experiencing one of its best moments, also because of the pandemic. At least this is highlighted by sources such as the BBC or Statista, who have pointed out that the shipments and sales of these teams have plummeted considerably since the first months of 2020, which is already half over. For example, in the case of shipments, it stands out that during the first quarter of the year they fell to an all-time low after a reduction of 11.7 percent. The companies shipped 275.8 million units in the first 3 months of the year, a figure that is considerably below the 312.3 million the previous year.
With the above in mind it is possible to say that, in effect, the pandemic has changed the smartphone market at least in terms of results. However, not only are changes taking place there, there are other sections that will be modified and there will also be adjustments specific to the industry that will be vital to be able to contain the impact of this pandemic and motivate users who increasingly find it undesirable to acquire a new mobile device.
Changes to the industry
Regarding the changes, there are at least 5 that can stand out with respect to the smartphone industry in general:
The first is that the drop in shipments stems from a drop in demand for new phones, which could continue for a considerable period of time. This decrease is the result of the economic crisis and the recession that has occurred have changed the priorities of consumers. In the face of financial distress, people are unlikely to buy a new phone unless they really need it. And if that is the case, the most affordable options may be preferred by potential buyers so as not to damage their pockets.
In various parts of the world, the unemployment rates that have been registered can be considered dramatic, for example, in the United States, as reported by the Washington Post, which reached a rate of 14.7 percent, the highest since the Great Depression; On the other hand, in the case of Mexico, INEGI has reported that more than 12 million people have fallen into unemployment in recent months.
With the above figures in mind, it is not surprising that a large number of consumers consider that they do not need a new smartphone as well as other products.
The second change is related to the previous one, given a drop in demand, the smartphone industry should and is already reducing its production as sales have fallen, income as well, while health concerns have risen.
Only Samsung reported that since April it reduced the production of its smartphones by 10 million units, a figure that represents less than half of its monthly production.
As a third change comes one that can be interpreted as a favor for companies in the industry because the increasing use of smartphones can boost the sale of other elements, such as accessories or apps, as well as data consumption. However, these profits do not represent enough to replace the sale of equipment and prevent firms from falling.
A fourth change is the fact that the market shares of the different companies are being modified. Although all manufacturers are experiencing a drop in sales of their equipment, it is possible to say that this occurs differently for each company, for example, the firm Counterpoint points out that during the first quarter of the year, Samsung’s share went from 21 percent to 20 percent, in the case of Huawei managed to maintain the same percentage; however, for Apple it improved 2 percent.
In this regard, it is expected that participation will continue to change as time passes and the problem continues.
Finally, a fifth change that the smartphone industry is having occurs in the adoption section of the 5G network. Prior to the arrival of the pandemic, the industry was living a race to bring 5G technology to the market. But now with declining revenues and shrinking markets, switching to this network could be even slower.
As TechNavio highlights, manufacturing delays and declining demand will delay the development of affordable 5G phones, which are seen as necessary to encourage large-scale adoption of the technology. As demand for all smartphones declines, 5G devices will find it difficult to find a foothold from which to grow.
In addition to the above changes, which can rather be considered effects, the smartphone industry is also changing in terms of the elements it presents to consumers in order to motivate trust and thus purchases. In this regard, some innovations that have been seen recently and that we share below are highlighted:
Samsung and the disinfectant box
As we reported at the time, the brand announced the development of a disinfectant box for smartphones, which also works as a charger.
This is an article designed for the new normal, which seeks to address the concern of consumers regarding whether their smartphones and other items can transmit the Covid-19.
Huawei and its robot-operated store
In Wuhan, China, epicenter of the Covid-19 pandemic, the brand opened a store that is fully robot-operated. Consumers can avoid physical contact with other people and generate purchases through touch screens.
The option of making sales like this is one that the brand could take to other cities and even countries as part of a new shopping experience adapted to the new normal.
Finally, in the case of Apple, an adjustment that has also led to physical retail to cope with the new conditions is a change in service. As we share here, the company has launched a reservation system with which its customers can define a time to attend the Apple Store of their choice and be personally attended by a specialist in a one-hour session.
The case of the smartphone market is undoubtedly peculiar, but as in other segments, it is necessary to adapt to the new conditions to try to leave behind the negative effects of the pandemic.
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