Smartphone Sales are Tanking

Source: Gearburn

The economic principle I’m exploring is “People generally respond to incentives in predictable ways”

My research question to help me study the economic principle is “How do companies use incentives to persuade consumers to buy their phone products?”

The article/video/etc published in The Register titled “Worldwide smartphone shipments DOWN for first time ever” demonstrates this economic principle because it shows

First, The global smartphone market has been decreasing in sales since the end of 2017 as people are starting to hold on to their current phones longer than usual. According the The Register, there has been a 5.6% (or ~25 million smartphone) decrease in the amount of smartphones that have found their way to new homes and owners. On the other hand, Chinese smartphones are increasing in sales such as Huawei and Xiaomi.

Second, The reason for the decrease in sales is due to two factors. 1) Updating and adding new features is becoming more difficult because companies already try to push new features on their phones but then run out of ideas for their next phone. 2) New smartphones are slowly becoming much durable and last longer in both physical and technological conditions.

Third, Smartphones are becoming more ¨bland¨ every year so companies have difficulty to give incentives to consumers to buy their products. Also, there are cheaper and better alternatives that are slowly showing up which are also hurting huge companies like Apple and Samsung such as OnePlus, Xiaomi, and Huawei which all happen to be much cheaper alternatives but their smartphones are able to compete with Apple and Samsung as they are on par, if not better, than iPhones and Galaxys.

In my next blog post I will research:  

What other issues are companies facing?