Smartphone Fever Seems to Be Cooling

Huge growth in the smartphone market appears to be over.

Only 48% of consumers plan to purchase a smartphone in the next 12 months, according to the 2016 Accenture Digital Consumer Survey for communications, media and technology companies.

The largest drops in purchase intent are in countries that previously experienced rapid growth in smartphone purchases, including China, India and South Korea. In the U.S. and U.K., consumers’ love affair with the latest and greatest appears to be over, with just 38% of consumers intending to make new purchases.  

One reason for the flattening of demand is that nearly half of consumers not planning to buy a smartphone say they are happy with their current device. Another 26% say they recently purchased a new smartphone, and 4% point to a lack of innovative features in new devices that interest them.

Another reason: Consumers report that price is the top barrier to the purchase of Internet of Things (IoT, or highly interconnected devices), with 62% believing these devices are too expensive. Russia, Romania and the Philippines report the highest share of consumers stating price as a barrier.

Security has moved from being a nagging problem to a top barrier as consumers are now choosing to abandon IoT devices and services over security concerns. More than two-thirds of the consumers surveyed are aware of the recent security breaches such as hacker attacks resulting in stolen data or malfunction.

Out of the consumers aware of hacker attacks and owning or planning to own IoT devices in the next five years, 18% decided to terminate the use of the devices and related services until they get safety guarantees. An additional 24% decided to postpone purchase of an IoT device or service subscription they were planning due to concerns over security.

Among other findings:

  • Four out of five online consumers own a smartphone, a huge increase of market penetration over the last five years. Globally, only Japan, Slovakia and Turkey have less than 70% smartphone ownership.
  • The survey also revealed a 9-point drop in purchase intent for tablets, an 8-point drop in televisions and a 6-point drop for laptop computers. Overall, a fifth of consumers surveyed plan to decrease spending; only 13% plan to increase spending on smartphones, tablets and laptops.