Future of Mobile phones is Brighter than it seems

A lot of fuss has been made about recent Gartner reports of globally shrinking mobile phone sales. Smartphones, it seems, are dominating the traditional mobile phone sector. But is this really the end of the road for mobile phones, or are we simply experiencing a transition in the meaning of the term? The traditional ‘phone-first’ mobile handset model is definitely being ousted in favour of a ‘computer-in-your-pocket’ one, but does this actually mean that mobile phone sales are shrinking, or is the meaning of the term ‘mobile phone’ just changing? In this article, we’ll look at the rise of the ‘mobile phone’, and explain why we feel the gradual decline of the sector is simply a symptom of outdated terminology.

The figures

gartner

Gartner’s report seems clear-cut: a shortfall of nearly 30 million phones leaves 2012’s mobile phone shipments down by around 1.2 percent. But a closer look at the numbers reveals that the market did not shrink, but rather decreased in equality. Apple and Samsung made huge leaps in shipment numbers, almost entirely at the expense of Research In Motion (now BlackBerry), HTC, Motorola, LG and, most noticeably, Nokia (whose shipments dropped by nearly 90 million over the course of the year). Much critical comment has been made about these more ‘traditional handset’ manufacturers – most of which is suggestive of a decline in standard ‘phone-first’ mobile phones in general. Take a look at this visual representation:

 2011smartphones growth chart

2012 smart phones growth

As we can see, Nokia have been seriously squeezed – from one side there’s Apple, and the other there’s Samsung. A crafty economist looking at the data might be tempted to predict a total duopoly within five years.

The thing is, these numbers aren’t really that useful. While it is true that Nokia, LG and RIM have all taken a hit over the past year – the companies themselves know they’ve been bad years – none of them have shied away from that fact. In fact, Nokia, RIM and LG have all taken steps to radically reinvent themselves. Nokia, once the world’s largest handset manufacturer, are scaling back operations to partner with Microsoft on Windows 8 devices. Their Lumia 920 has seen better reviews than anything they pushed out last year. RIM has gone so far as to change its name to its flagship handset platform, BlackBerry, and they’ve completely reimagined how a mobile Operating System should work. There are mixed reviews, but they’re no longer cleaving to the old ‘phone-first’ handset mentality. Other companies, like Lenovo, are releasing their own smartphones, further expanding the market and challenging other manufacturers.

Rather than seeing these figures as evidence of global technological saturation, or of a dwindling interest in mobile devices in general, we need to think of 2012’s figures as a turning point. 2012 was the last year in which major phone manufacturers tried to sell anything that wasn’t a smartphone (or, at least, a smart-ish phone). The decline in traditional phone sales has lurked for the past five years, but 2012 was the year in which it became painfully obvious to manufacturers that a new strategy was required.

So, are mobile phone sales dwindling? No. What we are experiencing – right now, in 2013 – is a paradigm shift in consumer mobile device technology. It may not be readily apparent to early adopters – mostly Western early adopters – who have been using smartphones for the past few years, but 2013 marks the point at which every major handset manufacturer has reinvented their product to align with the new paradigm. The mobile phone will be around for a while yet.