Internationally renowned research organization Canalys recently released a report showing that global smartphone shipments fell 11% year-on-year in the first quarter of 2022 due to poor economic conditions and low seasonal demand.
For the future of the smartphone market, a report in the Wall Street Journal quoted analysts at Canalys as saying that smartphone vendors must "be prepared to respond quickly to emerging opportunities and risks while focusing on a long-term growth strategy".
While the smartphone market is weakening, with the continuous development of 5G, artificial intelligence and other technologies, driven by global applications and experiential consumption, the smart wearables industry is developing rapidly, becoming the world's fastest-growing high-tech field. According to statistics, global smart wearable device shipments grew from 0.29 billion units in 2014 to 534 million units in 2021, and are expected to reach 637 million units by 2024. With this growth, will the smart wearables market be the later to take over the smartphone market?
The smartphone market is saturated
In 1999, Motorola launched a phone called the Tinto A6188, which was the world's first touch-screen phone, the world's first smartphone, and the progenitor of the now fast-growing smartphone. The phone used a 16MHz CPU, supported WAP1.1 wireless Internet access, and adopted PPSM (Personal Portable Systems Manager).
Since then, Ericsson, Nokia, Sharp and other manufacturers have made efforts, but constrained by objective conditions such as technology and market environment, the smartphone market has been showing a lukewarm state. Such a state has continued until 2007.
This year, smartphones were redefined on Apple products by Apple founder Steve Jobs. With the release of the iPhone, the entire cell phone market was completely turned upside down by all the unprecedented innovations it brought. Not only did it set off a wave of touchscreens, it heralded the official entry of the smartphone into the smart era.
Until today, the iPhone's pioneering large icon interface design, gravity-sensitive screen orientation, and a variety of integrated iPod multimedia apps can still be found on many Android phones.
As a result, the global smartphone market entered a phase of rapid growth.
By 2016, global smartphone shipments had reached an all-time high, with 1.47 billion units shipped annually. In 2019, however, global smartphone shipments fell to 1.37 billion units. Global smartphone sales, on the other hand, peaked at $483.3 billion in 2018 and fell back to $458.2 billion in 2019.
Going into 2020, the global smartphone industry's shipment performance became less optimistic, with a more pronounced decline, due to the impact of the New Crown Pneumonia epidemic and market factors, among others. According to a report published by the International Data Corporation (IDC), global smartphone shipments in 2020 were 1.29 billion units, a year-on-year decline of 5.9%.2021, a report released by Canalys Consulting (Canalys) showed that the total annual shipments of global smartphones amounted to 1.35 billion units, a year-on-year increase of 7%, but still did not reach the level of 2019.
Who is the next detonation point of the smart terminal
To date, a smartphone has such a rich application scene, which I am afraid that even Steve Jobs himself would be surprised - in this small screen, you can converge on banking, socializing, navigation, gaming, and much more.
Nonetheless, according to CNN, there is growing evidence that the era of the smartphone is coming to an end.
In fact, as the pace of related technological advances continues to slow, people are replacing their phones less frequently, which has led to a slow decline in global cell phone sales that has been occurring since 2016. As a result, technology developers and investors are looking for the next market to take off.
The smart wearables market is one of those kickstarters that they have high hopes for.
From 2020 onwards, the accumulation of market factors superimposed on the impact of the new Crown pneumonia epidemic, VR (virtual reality) headset devices have gained rapid development, and AR (augmented reality) application prospects are also very broad. Now, most of the large U.S. technology companies, including Apple, Google, Metaverse and Microsoft, are developing or selling VR or AR headsets. While the smart wearables market is currently a niche market (the market space occupied by a small group of customers with similar interests or needs in a larger market segment), it's about to get very busy.
Nowadays, there are more and more types of smart wearables, the common ones are smart watches, smart bracelets, smart glasses, ear-wearable products, and so on. In addition to a richer type, the function of smart wearable devices is also more and more, in addition to the conventional view of the time, call, electronic payment, but also increased health monitoring, travel management and other more functional, and these functions and applications on the continuous innovation, opened up a new consumer market.
Can smartphones be replaced
In the face of this promising market for smart wearables, The Economist believes that there is still a need to maintain the necessary sobriety, especially in the two years of headset devices: be cautious about any claims to have discovered the next big technology platform.
The UK's
The Economist article argues that this is because there have been a number of previous examples of this kind of thunder and lightning. For example, tablet computers were once claimed to be the archenemy of smartphones, but Apple's iPhone sales are still six times that of the iPad; the smart home market, which was once seen as having unlimited prospects for development, has so far developed, and Amazon's Alexa smart assistant is at best a jukebox with a timer function; and in-vehicle technology, although it has proved to be of practical value and investment potential, is still a long way from becoming the centerpiece of digital life. The vision of becoming the centerpiece of digital life is still far away. So it's not hard to imagine a similar dilemma for headsets, which are currently used primarily in the gaming space.
However, since the outbreak of the new Crown pneumonia epidemic in 2020, the VR and AR industries have also entered a phase of rapid growth. 2020, the global virtual reality market size of about $ 13.7 billion, of which $ 9.4 billion for the VR market and $ 4.2 billion for the AR market. Some analysts believe that in the five years from 2020-2024, the average annual growth rate of the global virtual reality industry scale is about 54%, of which the growth rate of VR is about 45%, the growth rate of AR is about 66%, and the market share of both is expected to reach $36.5 billion in 2024.
In addition to VR and AR, consumers are also gradually turning their attention to a number of new smart wearable devices, such as voice-activated smart headphones that support phone calls, read text messages, and other functions, as well as smartwatches that combine memo reminders, navigation, and fitness functions. At the same time, a number of health smart wearables are also emerging, ranging from blood sugar monitoring to sleep monitoring. In the U.S., sales of smart wearables are already approaching those of smartphones.
However, these small devices are more like accessories than replacements for cell phones. But as computer apps move from pockets to people's wrists and ear areas, more and more consumers will gradually shift their attention and spending away from their phones. As devices for VR and AR become lighter and cheaper, they could become the most powerful products in the smart wearables lineup.
Still, people won't be ditching their smartphones anytime soon, just as they didn't ditch their laptops 10 years ago. But as they use headsets more frequently, or will use VR and AR devices more frequently, more and more people will use their phones only as a complementary device, providing computing processing support for other devices. (Compiled by Nian Shuangdu)
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Counterpoint, a well-known market research analyst, recently released a report showing that the overall revenue of global smartphone vendors in 2021 amounted to $448 billion. Among them, ranked first in the world is Apple, the annual revenue of the cell phone segment reached $ 196 billion. Samsung came in second place with $72 billion in handset revenue, followed in order by Chinese brand OPPO with $37 billion, Xiaomi with $36 billion, and Vivo with $34 billion.
Data released by the International Data Corporation (IDC) shows that global smart wearables shipments reached 533.6 million units in 2021, a 20% increase year-on-year. By 2025, global shipments of smart wearables are expected to reach 800 million units, a five-year compound growth rate of 12%.