Depending on who you ask, the smartphone market’s start in 2023 is in a state of turbulent decline.
With markets saturated, retailers’ sales and general smartphone queries down, and adoption rates seemingly peaked, it may look like the sun’s finally stopped shining for iPhone, Android, and co.
Ask others, however, and they’ll tell you that as manufacturers and consumers alike continually redefine what a smartphone actually is, and that the future looks brighter than ever for those pocket-sized super-computers that have come to be such an integral part of our daily lives.
So, which is it?
Has the smartphone truly reached a zenith, the likes of which it will never surpass again?
Or are we simply entering a new age of portable, personal technology; one that will see the likes of the Apple iPhone and the Samsung Galaxy continue to evolve?
In all honesty, it’s a little of both.
Below, we’ll discuss exactly why some are skeptical about the industry’s future, why others still see bright days ahead, and why the answer to the question of precisely what a smartphone is will constantly change.
What is a Smartphone?
You haven’t come to a site like Mobile Tech Addicts to be told that smartphones are portable communications devices.
Or that they connect to cellular and Internet networks to carry out various functions via apps downloaded from the App store.
If you’re here, there’s a solid chance that you’re well aware of all this and most likely have one of these portable communications devices in your pocket right now!
You’re also probably well aware that describing a smartphone in such a way is a little like saying that a home is merely four walls, a roof, and a door, when the truth is that- to you, me, and the millions upon millions of people who own one- they’re so much more than that.
A smartphone isn’t simply a communications device.
Instead, it’s a persistent and consistent assistant that allows us to interact with the world and navigate our way through life in an endless variety of ways.
A smartphone is a personal finance machine through which we keep on top of our accounts and pay the bills -often in seconds- so that everything runs smoothly.
It’s a dynamic productivity suite for getting things done on the go.
Moreover, it’s precious, once-in-a-lifetime memories, captured, shared, and stored for eternity up in the ever-present cloud.
During the height of the global pandemic, the smartphone was an essential lifeline.
It was -and for many, still is- a way of connecting and maintaining some level of human contact in the midst of the loneliest of isolation.
Our mobile phones were a means of checking in with the office whilst working from home so that even a major, life-changing event like COVID-19 didn’t have to stop us from earning a living and putting food on the table.
Still, this isn’t the time to write a love letter to the smartphone.
And neither is it to simply wax poetic about the near-infinite number of ways that it helps us throughout our daily lives.
We merely mention this to stress the fact that a smartphone isn’t just a smartphone.
It’s fast becoming an essential tool for modern living; as commonplace and crucial as running water in the home or the engine in your car.
In some respects, this has been a very good thing- not only for manufacturers like Apple, Samsung, Huawei, Motorola, and the like, but also for the multitude of businesses who now make up the multi-million dollar ecosystem surrounding mobile devices.
After all, the more essential these devices become, the higher the sales increase.
In other aspects, the smartphone industry’s success has also been its biggest challenge.
Because once everybody owns a really good smartphone, why would they ever need to buy another?
The State of The Smartphone in 2023
According to some industry analysts, the above conundrum has resulted in smartphone marketing slowly grinding to a plateau after an undeniably solid run of success.
#1. The Rise of The Smartphone
According to figures from Statista, the number of smartphone sales worldwide has increased- if not always massively, at least steadily- every year since the launch of the first iPhone back in June 2007.
That year, the success of Apple’s flagship device– combined with that of other popular models released that year, such as the Samsung SGH-F700- resulted in 122.32 million smartphone units being sold to end consumers.
By 2010, that number had more than doubled to 296.65 million, and by 2012, it had more than doubled again to 680.11 million; thus, establishing a trend that seemed to show no signs of dying down any time soon.
Indeed by 2014 the industry crossed a billion units solid mark for the first time, with figures showing 1,423.9 million units sold.
#2. Why Smartphones Took Off
This once seemingly never-ending rise was undoubtedly due to many of the features and functionalities we discussed earlier (as well as in another Feature article).
As designers and manufacturers continued to improve the technology used in their devices, it became evident how those devices could be used to enhance so many factors of our daily lives.
The increase in image quality of the standard smartphone camera went from being a grainy, shabby image, to one that now boasts of crystal clear sharpness and high resolution akin to that of a mid-priced DSLR camera.
Additionally, enhancements to operating systems like Apple iOS and the launch of its main competitor, Android OS, brought with them an increasing number of tools.
Interestingly, this allowed users to do more, do it faster, and do it without the need to carry a colossal device around.
Of course, we can’t neglect to mention all of the third-party enterprises whose apps helped bolster the smartphone’s appeal as a must-have essential.
In 2012, Facebook adopted a “mobile-first” policy to dictate how they operate. Soon, countless other companies began to focus more of their energies and attention away from the traditional desktop as well.
Sure, this was the result of a somewhat circular pattern: The more people that bought smartphones, the more companies strived to meet those people on their devices.
The better they accomplished that, the more appealing smartphones became- and thus, the cycle continued.
This shift towards a mobile-centric approach by major companies ultimately helped get us to a stage where today, the average consumer would no more go without a smartphone in their pocket than they would a TV in their living room.
However, that does mean that this approach was the only thing that helped smartphones become the ever-present part of our lives they are today.
#3. Better Coverage and Connectivity
It would be crazy of us to talk about the factors contributing to the growth of the smartphone without mentioning the fact that there are better networks available today than there were a few years ago.
These networks, and the coverage they provide, now make it possible for more people to own a smartphone than ever before.
Yes, it’s true that connectivity issues still account for a significant number of general smartphone inquiries sent to manufacturer and Smartphone tech support helplines, but the growth of 4G, 5G, and, eventually, 6G now means that people in rural areas or those living in areas with poorer weather can enjoy much better signal than they could just ten years ago.
Even in environments where the signal is already decent, improvements in Internet and cellular networks mean that video calling, gaming, and streaming media can all be delivered at a much better quality than users enjoyed in the past.
#4. Market Saturation and Plateau
So far, so good then.
However, as much as it was a good thing, all of these contributing factors helped smartphone sales skyrocket for the better part of a good ten-year period.
This in turn also hit the smartphone market with a problem faced by many an industry at some point:
Once every prospective buyer has bought your product- who else are you supposed to sell to?
In other words, smartphone adoption rates began to reach a natural peak, while the very fact that smartphone technology has continually gotten better means that they continue to perform well for longer.
Ultimately, this meant that more and more consumers began opting to stick with their current device for greater lengths of time rather than getting swept into the typical two-year upgrade cycle.
This problem is reflected in the same worldwide smartphone sales figures from Statista that we showed you earlier.
By 2017- a whole decade after the aforementioned iPhone launch changed the game forever- global sales were close to peaking at 1,536.54 million units sold.
Those numbers did peak in 2018, but only at a point marginally higher than they were a year earlier, with 1,556.27 million units sold.
That was as good as it ever got for the smartphone industry.
For the next two years, sales began to decline.
Not just drop, mind you, but they all but plummeted off the proverbial cliff!
In 2019, as global shipments dropped by 6.8%, Apple announced that their 23.2% slump in fortunes was the “largest single-quarter decline in the history of the iPhone.”
At the same time, market analysts described the industry as being in a state of “freefall.”
Things got even worse the following year with worldwide sales in 2020 hitting their peak at 1,378.72 million units, which was the lowest figure since 2014.
In fairness, that was a year when the arrival of COVID-19 further aggravated the industry’s existing problems.
Additionally, according to celebrated global business consultants Gartner, this brought with it a kind of shelter-in-place mentality, restrictions and economic uncertainty.
Further, the pandemic hit not only the smartphone industry, but countless others too.
If we needed any proof to back this up, we only needed to look at the figures. After plummeting to those aforementioned low figures in 2020 (the first and worst year of the pandemic), things did bounce back to 1,535.36 million units in 2021.
However, even that number shows us an industry that has been in a state of plateau since 2017.
Is this it then?
As we march into 2023, is it fair to say that the state of the smartphone is destined to remain in a permanent state of stagnation?
Are we now looking at an industry that has gone just about as far as it can go?
Or that we must now be content with coasting along at roughly the same level forever?
Despite the recent downturn, industry experts continue to predict good things, estimating that the market will continue to grow by 9.5% year on year to a new peak of $795.3 billion by 2027.
Still, if the industry is going to get there, it may have some challenges to overcome and opportunities to seize.
Challenges and Threats to the Growth of the Smartphone in 2023 and Beyond
Plateaus and plummeting sales figures aside, it’s fair to say that the smartphone as a device is in a reasonably healthy state right now.
Speak to anyone on the street and ask them, “What is a smartphone?” and you’re unlikely to find anyone who can’t give you an answer.
Their place in modern society is both well established and deeply entrenched.
This is no passing fad. Smartphones are unlikely to go the way of the MP3 Player or the humble fax machine.
They’re here to stay, but if the industry is going to grow, then it certainly has some challenges to overcome, some threats to deal with, and some increasing customer frustrations to address first.
Such problems include:
#1. Data Protection And a Lack of Cooperation
The further we move into a digitally-driven society, the more data protection and privacy laws become a serious concern.
The arrival of the European Union’s General Data Protection Regulation (GDPR) in 2018 had global consequences for manufacturers and consumers alike.
Moreover, similar revised laws and policies such as the California Consumer Privacy Act (CCPA) had identical repercussions.
These laws, coupled with the gradual shift in consumer mindsets for greater privacy and control over their data, forced smartphone manufacturers, Operating System (OS) designers, and app developers alike to adopt a “privacy-by-design” or “data protection first” approach to the products and services they create.
For the most part, this was welcomed by consumers and kept many of the key players in the industry out of some major trouble, but as the years have gone by, we’ve seen this “privacy-by-design” ethos lead to manufacturers butting heads with those who both depend on the smartphone for their success and help contribute to making devices like the Apple iPhone and Samsung Galaxy such must-have items.
For instance: In the summer of 2021, Apple rolled out a new iOS update that allowed users to decline to have their data collected by apps they use on their devices.
This was a big deal certainly welcomed by consumers who were fed up with having to trade their data for access to certain apps.
Still, it was also a big deal- one that was much less welcomed- by app developers and major brands.
Famously, the introduction of the App Tracking Transparency feature in iOS 14.5 caused a major rift between Apple and Facebook (now Meta).
Meta’s Instagram, Facebook, and WhatsApp applications boasted 1,356 million global downloads in 2021, making them the second, third, and fourth most downloaded apps, respectively.
(If you’re curious, TikTok was number one with 656 million downloads.)
In other words, Mark Zuckerberg’s social media empire was- and is- heavily reliant on mobile. In fact, in Quarter 3 of 2019 (the last available data we could find), mobile accounted for 94% of Facebook’s advertising revenues.
Since the brand relied so heavily on tracking user data to generate its multi-billion dollar advertising revenue, App Tracking Transparency naturally caused the company a major headache.
Not too surprisingly, Facebook went on the offensive with a sort of a guilt trip, playing the “small business” card.
This was to insist that the only people Apple was hurting with its new feature were smaller enterprises that relied on ad tracking to survive before- and especially during- the global pandemic.
The goal wasn’t necessarily to convince Apple to revoke this feature, but rather to convince end users to collect their data.
Whether this was a case of a major corporation taking a stand for the little guy or a hugely successful brand trying to keep a good thing going probably depends on how skeptical you are.
Either way, it didn’t seem to work.
According to one survey published a month after the introduction of iOS 14.5, some 96% of iPhone users had opted out of ad tracking.
Up to now, Facebook and similar companies have simply found a workaround.
It claims that a loophole in the App Tracking Transparency terms allows them to continue tracking user data. Tracking is possible as long as it is anonymized and aggregated.
Yet, you have to wonder how long brands like Meta can continue to rebel against the platforms that help them succeed.
It remains to be seen whether it is precisely the length of time those platforms can continue to make life difficult for the kind of apps that keep their devices in the hands of users.
Ultimately, we’re looking at a three-way conflict here between manufacturers, app developers, and, yes, end-consumers.
If the state of the smartphone is to remain healthy in 2023 and beyond, this kind of conflict must be resolved similarly.
#2. Expensive Serving And The Right to Repair
Most common smartphone problems can generally be resolved with a quick hard reset, either of the operating system or applications.
However, consumers are finding it increasingly challenging when something goes wrong with the hardware.
As smartphones become increasingly sophisticated, manufacturers have been criticized for deliberately designing devices that are nigh-on impossible to repair unless they are sent back directly to manufacturers and pay top dollar to get them fixed.
Even when components can be fixed or replaced by an independent third-party, manufacturers have similarly been accused of jacking up the prices of those components, effectively pricing the average consumer out of repairs and leaving them with no choice but to buy a new phone.
This, as you can imagine, ultimately helps to keep sales figures afloat.
Indeed, most general smartphone inquiries revolve around fixing a malfunctioning screen or replacing a battery that has clearly had its day.
Unfortunately, both products can be notoriously expensive to fix and difficult for the average user to do so without taking it to a third party who knows what they’re doing.
Anything else, and we’re left with no choice but to get in touch with the manufacturer, who is likely to charge so much money that we might as well just purchase a new phone!
Sure, this approach is one way that the industry itself ensures that it remains profitable, but it’s an approach that can only remain sustainable for so long.
As the Right to Repair movement continues to gain ground in places like the United States and Europe, the days of pricing consumers out of being able to fix their own devices may eventually be numbered.
This means that manufacturers would be wise to spend 2023 finding a way to remain profitable without further angering the very consumers they rely upon to ensure that profitability in the first place.
#3. Wearables And Other Devices
It’s no secret that wearable technology has developed at a rapid rate over the past few years, and that today, smartwatches and similar devices are more popular than ever.
Figures for the number of wearable technology devices sold worldwide in 2023 is expected to be double what it was back in 2019, while smartwatch sales alone are expected to increase from 37 million back in 2016 all the way to 253 million units sold annually by 2025.
On the face of it, this could be a worrying time for the smartphone industry, especially with some industry insiders and analysts predicting that wearable technology will eventually replace the smartphone as one of the most important gadgets that we own.
To be fair, this may not be a major cause for concern right now. However, even those predicted 253 million sales we’re supposed to see three years from now are still dwarfed by the billions of sales generated by the smartphone industry.
Still, wearable tech isn’t something that the industry can afford to ignore altogether.
As 2023 rolls on, it would be wise for major players like Apple, Google, Samsung, and the like to keep an eye on things like the smartwatch market, keeping an eye out for the challenges, and even the opportunities, that it may present.
Opportunities: How The Smartphone Market Can Recover, Grow, And Evolve In 2023 And Beyond
For all that the smartphone currently has working against it, this game-changing device is certainly here to stay.
What’s more, the industry as a whole has almost as many opportunities to recover and grow as it does challenges to overcome.
#1. Foldable Smartphones
One of the biggest factors that many experts point to contributing to the decline in smartphone sales is a lack of innovation.
With long battery life, lighting-quick connectivity, larger display screens, and premium-quality cameras all now increasingly the norm, consumers’ needs have been well and truly met.
Manufacturers are now criticized for offering little in the way of the kind of true innovation that would motivate those consumers to buy new devices.
While it may be true that smartphone innovation has stagnated in recent years, that doesn’t mean that we aren’t starting to see smartphone makers once again igniting the spark that might set the industry ablaze once more.
One of the biggest innovations we’ve seen has been the launch of foldable smartphones like the best-selling Galaxy Z Fold 3, the Galaxy Z Flip 3, and the old-school-inspired Motorola Razr 5G.
Some experts have insisted that foldable smartphones are the future of the industry and one of the key drivers of smartphone growth; however, in 2023, they’re not without their issues.
The main one, quite simply, is consumer interest.
For over a decade now, we’ve all been used to our smartphone hardware looking and operating a certain way.
For the most part, it works. So far, the likes of Samsung, Microsoft, Motorola, and other foldable phone creators haven’t yet given the average consumer a compelling enough reason to ditch what works and switch to a foldable device.
This is something we can, hopefully, expect those major brands- and others like them- to invest more energy in over the coming year and beyond- though not without first considering another major hurdle that may be currently holding foldable tech back from being the industry savior it’s been tipped to be.
The challenge is this:
- The cost of foldable phones. Most devices are still in the very high price range, with most of the better models costing at least $1,000 or thereabouts.
If the industry is to truly capitalize on the opportunity presented to them by foldable smartphones, now is the time to focus on making them more appealing to the average person on the street in terms of both price points and unique selling points.
#2. 5G And Beyond
Another significant opportunity for the smartphone industry has been the rollout of 5G networks and 5G-capable devices.
If used effectively, 5G connectivity can offer existing smartphone users that all-important compelling reason to upgrade, offering the kind of connections that make it possible to download an entire movie in under 60 seconds and experience the kind of lightning-fast Internet browsing that has hitherto seemed impossible.
In emerging markets, too, 5G can help improve smartphone adoption rates in areas where they’re currently lacking the most.
However, this in itself still requires a major investment of time, focus, and resources as developing a worldwide 5G infrastructure is still an ongoing concern that may take years to complete.
#3. Budget-Friendly Devices
Coming back to what we said earlier about the high cost of foldable phones all but ensuring that many users are priced out of owning them, the final major opportunity for the smartphone industry to recover and grow in 2023 is simply to make their devices more financially accessible.
As Cnet reports, both Apple and Samsung are hitting the market with budget-friendly devices in 2023, an approach that could well prove to reignite adoption rates among would-be smartphone users for whom high price tags have been a major barrier to entry.
What is a Smartphone in 2023? The Final Word on The Current State Of The Smartphone
So, there you have it- the current state of the smartphone in 2023.
As you’ll have seen by now, market saturation coupled with a lack of innovation and factors beyond anybody’s control (we’re looking at you, COVID-19), have all created a bumpy few years for the industry.
Meanwhile, improved technology at lower prices could prove to be just what the industry needs to bounce back providing it can effectively capitalize on the opportunities presented by foldable technology and 5G connectivity.
What this ultimately means, then, is that when we’re asking “What is a smartphone?” The honest answer (beyond the basic sense that it’s a powerful portable computer and communications device rolled into one) is that the smartphone is an increasingly essential device that is currently at a crossroads.
From these crossroads, it’s up to the prominent names like Apple, Samsung, Google, and Motorola (not to mention brands who co-depend on smartphones for success like Meta) to determine which path the industry takes.
Go down one road, and years from now, we’ll still be talking about how the smartphone hit its pinnacle and never moved on from there.
Sure, that might be fine. After all, billions of units shipped worldwide every year still make for a thriving industry by anyone’s count, but something tells us that this isn’t where things are going to end.
Instead, we fully expect- and certainly hope- that all those major players mentioned above to take the other path; a path which may be strewn with challenges and obstacles to overcome, but a path which, once taken and fully committed to, could ensure that the state of the smartphone is healthier than ever in 2023.