Has the Mobile Phone Market Peaked? -Ethan Nguyen (EC004)

Mobile phones have become commonplace in peoples lives. Having 4.78 Billion people owning a phone in 2020, it is clear that mobile phones are one of the largest markets in the world. Over the past 20 years the market value of mobile phones has risen significantly, but has its progression plateaued?

The mobile phone market is described to be a ‘mature market’. This means there is an absence of significant growth, often caused by lack of innovation. In regards to the mobile phone market, the reason for its plateau is because of the fact that buyers replace their phones less. Forecasters are optimistic that the introduction of 5G networks will give incentive for buyers to upgrade, although it will be a niche feature until 5G gains more support. For now the market can be described as saturated as its reaching its maximum sales volume.

Back in 2015, Apple introduced the iPhone 6 which paved the path of larger screens on phones. From this point, other tech giants followed to create bigger, faster and longer lasting phones. Customers simply have not much reason to replace their 2 or 3-year old smartphone. As growth decreases, the want for innovation increases. Manufacturers such as Samsung, Apple or Huawei dominate the market, as other companies do not have the scale to compete. This decline of growth in the mobile phone market be reasoned by the quote “too many good phones are already out there”, stated by Apple CEO Tim Cook. Another factor that contributes to this decline, is cheap iPhone battery replacements in 2018, leading to increased longevity of older phones. Shareholders and investors also directly effected by this mobile phone market plateau. The peak has created discussion on whether it is worth to buy shares of the big mobile phone manufacturers such as Apple, Samsung and Huawei.

We are at a point where most people that want a mobile phone has one, so sales have stagnated. New innovation from manufacturers have tried to spark the customers’ interests, but so far these innovations more a luxury than a necessity. I believe that once 5G networks become the norm, people will buy the newly supported phones, but as of now mobile phone sales will continue to decline.

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The Mobile Phone Market Has Peaked