Phone shipments mark 'the biggest annual fall' on record, expensive flagships to blame

Phone shipments mark 'the biggest annual fall' on record, expensive flagships to blame
Buried in the latest industry reports that witnessed quite a few movers and shakers, is the fact that Q4 actually saw the largest quarterly drop on record in smartphone shipments. That's right, research firm Strategy Analytics showed that shipments were 9% down in Q4 2017, compared to 2016, or "the biggest annual fall in smartphone history."

The culprits? Longer upgrade cycles, particularly in China, due to midrangers becoming "good enough," while average selling prices for flagships are getting ever higher with no "wow" factors attached to their ballooning costs. Ever since smartphone subsidies were removed by carriers, we've seen a much more pronounced rise in high-end phone prices, until we reached "the year of the $1000 phone" with the iPhone XNote 8, or the Pixel 2 XL

Not only has the concept of the $400 flagship dead and buried, as Chinese makers have also increased their starting tags, but there's never been a launch price increase for high-end handsets as drastic as last year. Apple, for instance, clocked a record nearly $800 ASP for its phones in Q4.  "If Apple wants to expand shipment volumes in the future, it will need to launch a new wave of cheaper iPhones and start to push down, not up, the pricing curve," says Strategy Analytics. Apple's rumored "affordable" iPhone 9 with 6.1" LCD display that is allegedly coming down the pipe, may change the shipment gloom, though, as analysts are predicting it would account for no less than 50% of Apple's 2018 models' total sales.

The researchers may be on to something, as the record drop in smartphone shipments last quarter coincides with the record increase in phones' average selling price (ASP). It turns out that the ASP increased a full 10% year-on-year, to $363, while the number of phones sold globally increased just 1.3%. It is still a shipment increase for the whole of 2017, but if Q4 is any indicator, 2018 may see an annual drop for the first time, as people are keeping their phones longer, apparently finding it hard to justify shelling a grand for a phone.
Phone shipments mark 'the biggest annual fall' on record, expensive flagships to blame
source: SA

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50 Comments

1. midan

Posts: 2557; Member since: Oct 09, 2017

Not many see value of buying android flagship phones.

5. cmdacos

Posts: 3819; Member since: Nov 01, 2016

There's lots of value for users like me that only see an iPhone as limitations you have to be willing to accept.

18. meanestgenius

Posts: 21353; Member since: May 28, 2014

It’s not just Android flagships that people don’t see value in. iPhone shipments were less than they were previously this quarter, remember? Flagships from both Apple and the top Android vendors have become too expensive with not enough wow factor, and the buying public has taken notice of this. Don’t be that guy that starts a flame war in the comments section.

53. nhtechguy

Posts: 3; Member since: Jan 22, 2018

I bought into the Google pixel phone because having the direct stock android phone makes the difference. I bought a note 8 and switched to the pixel 2 xl. Love it.

66. yann

Posts: 604; Member since: Jul 15, 2010

It's a little tricky statistic to excuse Apple fail in sales. Why? Samsung, Huawei and many others release their main sellers in spring early summer. It is normal the demand to decrease in Q4. Exactly the opposite of Apple, who release their new phones in beginning of Q4 and have good demand in it. So, take the article with a little pinch of salt. Cheers.

2. Phonehex

Posts: 732; Member since: Feb 16, 2016

As a user of the Note 8 and the iPhone X , I can tell you that none of these phones are truly worth their prices. Overpriced for sure , but then what can I do . I love new phones and new tech . :)

9. SIGPRO

Posts: 2810; Member since: Oct 03, 2012

What new tech does iphone have? They are way behind the market!

10. boucha26

Posts: 50; Member since: Jul 01, 2015

ok what is ur fav android phone. and tell its new tech....

30. makatijules

Posts: 835; Member since: Dec 11, 2017

But we arent being charged extra for old tech. We received an $80 price increase on the Note 8 over the 7 because we got a cmera with an extra lens, we got more storage, a new design, a bigger and higher resolution display and we got premium headphones and free gifts. All of which combien was $300 of value that we paid only $80 for. No none of the tech we got was new. But it was still added and it does cost money. Apple added only some of that and increased the cost $200/$300. Big difference bro. What free gifts did you get? Did you even get a fast charger on the box? Did you get premium headphones? Did you get a new camera? Try not to break your phone, its gonna cost you $500 to get it replaced because they don;t repair them. $500 even with having paid $150 for AppleCare+. If my Note breaks, it will cost me $200 to replace with my carriers insurance vs using Apple. My carriers is charging $280 to replace the iPhone X though, due to Apple's ridiculous replacement costs. DO the math bro. You are getting it where the sun doesn't shine. DEAL WITH IT. What sad is, we are all gettign burned to a degree, but Apple fans are begin roasted and the sad thing is; you're to stupid to even notice or care.

32. Ninetysix

Posts: 2933; Member since: Oct 08, 2012

Any idea why the Note 8 lost to the iPhoneX in DXOmark and Displaymate?

63. makatijules

Posts: 835; Member since: Dec 11, 2017

Ask is I should care about DXO opinion. Their scores can't be be determined because it's based on BS.. Samsung makes the best displays. The display doesn't belong to Apple. The only part of the iPhone Apple owns is the SoC and the Logo.

22. macawmatt

Posts: 133; Member since: Feb 20, 2012

We had Note 7s, and had to have the Note8 when it came out. My first and probably last Samsung phone cause I won't spend this much for a phone again.

25. makatijules

Posts: 835; Member since: Dec 11, 2017

You can not buy them until the price comes down. Because if we didn't buy them, the price would immediately go down. Example, Apple usually never drops the cost, until a new model. But carriers offer deals to get subscribers. I can 100% guarantee is less than 1M people ran out and bought the iPhone X right away, the phone's price would have dropped by Black Friday from Apple's own website. But becauie idiots ran and preorder by the millions Apple's like see, there is no price to high. We have these suckers. Samsung's Note 8 price was legit. The Note 7 was $850. You add the cost of more storage, extra camera, new design, premium headphones, and the free gifts; there is more than $300 in extra value that costed you only $80. And yes $930 is pretty steep, but even with tax, the phone was still less than $1000. Apple started at $1000 with the X with the 256 at $11590. With Samsung i can buy a 256GB sd card for about $75-$125 and still come out cheaper than an iPhone with it and have more storage too.

33. cncrim

Posts: 1558; Member since: Aug 15, 2011

Then you are the problem my friend not the price is the problem. If people slow down the buy, OEM will have make adjustments. If you keep dash out money then basicly you are said it is ok charge me that much.

51. Fred3

Posts: 342; Member since: Jan 16, 2018

With these phone companies like T-Mobile, Sprint, AT&T an Verizon letting customers make payments on these expensive prices it will just make it harder because customers will keep buying as long as they can make payments.

4. cmdacos

Posts: 3819; Member since: Nov 01, 2016

I find far more value in my Note8 than in any other phone on the market. Would have paid 1500 if that's what it took to get a phone that can meet my needs.

7. maherk

Posts: 6684; Member since: Feb 10, 2012

I love my Note 8, but I still hope Samsung and Apple fail miserably in reaching their goals regarding the Note 8 and iPhone X sales. When a company like Samsung wants to see us a mid-ranger like the A8 for $500, when you can buy a Mate 10 for an extra 40 dollars, then you know how greedy and arrogant they have became.

12. midan

Posts: 2557; Member since: Oct 09, 2017

"When a company like Samsung wants to see us a mid-ranger like the A8 for $500, when you can buy a Mate 10 for an extra 40 dollars, then you know how greedy and arrogant they have became." You make it sound very easy, Huawei has very different way to do things and compete. If you haven't noticed they are rising their phone prices too because if you want to do well as a company you have to start making some money too. Big companies can't sell products with the price tag of chinese companies, it's not possible. Everyone would have done that business wise if it's a good thing or something which can be done. Chinese companies are beating big android companies and they can't do anything about it.

17. maherk

Posts: 6684; Member since: Feb 10, 2012

No one is asking Samsung to offer their phones at similar pricing to that of Huawei's. But there is no excuse for increasing the prices of your flagships by $300 in less than 2 years. Yes, prices for smartphones has increased in general, but Apple, Samsung, and Google have taken this to a whole new level.

36. makatijules

Posts: 835; Member since: Dec 11, 2017

But Samsung "gradually raise costs. Example, S5 was $599, the S6 was $650, the S7 was $750, the S* is $850. Apple jumped from $750/799 on the iPhone 7, to $800 for the iPhone 8 and then offers the X for $1000 in just one year model difference. That is far different than what Samsung did. It pains me that every time you miss those type of details. The Note started at $599, then went to $699, $799, $850 and then $930. With every Samsung price increase we got something for it. The S6 went to a glass and metal design, got more storage, better cameras. The also got more with improvements and the S7 was waterproofed. It costs more money to waterproof a metal and glass phone vs the plastic design of the S5. Also the edge models have a [price increase because the glass is more expensive to make. The Note consistently improved including the S5 also getting a metal and glass design of the plastic ones prior. The Note 7 was waterproofed and also received a new design. Also the S7 and Note 7 has the sdcard return, and that also costs money. Note 8 got dual cameras, premium heapdhones, storage increase and improved deisgn oevr the Note 7. That cost money and include premium headphones and free gifts. Samsung actually gacve us something for price increase. WHAT DID APPLE GIVE? The battery gained a 10% size increase, they went back to dual glass, they added wireless charging, they added fast charging but didn't even include a fast charger and they already had phones with 64GB storage and they didn't even add premium headphones, yet raised the cost $200/$300. Those are the facts bruh! Samsung gave soemthign for each price increase. Apple gave NOTHING> And I am nto talkign about free gifts. How is ti Samsung makes a smaller phone than Apple, yet has a 40% larger battery? Buit when Smusng doesn't oncrease battery size,m the worms come outy the ground talkign about it, any even with their new batter design with 2 batteries, they still can't even match Samsung battery size that have had for 4 years now and they are chargign $1000 for it? But you aren't calling them out? You in your very first sentence you call out Samsung? Both Apple and Samsung are greedy. But considering Samsung product portfolio vs Apple and the higher overhead Samsung pays, even with that they give us something for the price. Apple gives you NOTHING! They don't even want to claim responsibility for their always breaking garba8ge that all the fan ignore. But as soon as Samsung or any Android OEM has an issue, they come piling on like flies on dong. Samsung is 5 times the size of Huawei. To compare pricing is dumb. The Mate 10 Pro yes is their flagship, but it still does less than the Galaxy S and especially the Note 8. And yet it cost as much as the S8+.

31. makatijules

Posts: 835; Member since: Dec 11, 2017

Ummm, the iPhone and Galaxy phones are all built by cheap labor. The different is, Samsung and Apple are the top brands and they simply charge more. Samsung however has more to pay for. They have 300,000 employees, they have factories, they make their own products, they have to distrubute 100's of products to over 300 couuntries. So yes they have lots of costs. But even with such costs, there $100 phones are more reliable than Apple' Apple can make staggering profits because they only have 90,000 employees, they have ZERO factories, they use Chinese salve labor, they offer one product in about 230 countries which means less distribution costs. The A8 is a "premium" mid-range phone, just like the iPhone. Because a phone with a 1080p+ display is a midranger consider top premium phones have QHD or OHD+ displays. So while you are bumping your gums talkign about Samsung offering a mid-ranger for $500, that 1/2 what Apple is charging for similar specs and capabilities. Ignoring the obvious again. And yes I notice you quoted someone else. What I said goes to both of you.

38. maherk

Posts: 6684; Member since: Feb 10, 2012

No one is interested all these biased essays you keep on posting.

35. cncrim

Posts: 1558; Member since: Aug 15, 2011

Lol, you hope the company not reach their goal but then still buy there phone. What the heck you saying men? You are contributed to your own problem.

37. maherk

Posts: 6684; Member since: Feb 10, 2012

I can afford it and price isn't a problem to me when I like something. My problem is that Apple and Samsung are making it tough for many people to buy their latest and greatest.

47. makatijules

Posts: 835; Member since: Dec 11, 2017

Yep. But just because you can afford them, you shouldn't buy them. That way, the OEM's will cave in and not have a high price. But since they have 10M+ people who will do what you do, they will never charge. Because the people who aren't buying them anyways, still aren't gonna buy them. Those aren't the people who are the problem. Its people like me and you who are the problem as the poster said. Just because you can afford them, and yet you say they are not worth what they cost and you buy them anyways, means its actually not an issue and you shouldn't be complaining. Don;t worry about what others can or can't afford. Because you aren't looking out for either. And what I said goes for me as well. I'm just as guilty as you. I bought the Note 8 because i got it on a BOGO deal. If AT&T didn't offer that I wasn't gonna buy it. I also hated by S8+. I didn't like the phone. I though the S8 was better, but it was too tiny for me. It is unfair to everyone, to complain about a problem, and be part of it too.

64. Jrod99

Posts: 696; Member since: Jan 15, 2016

Yeah. They need to dial those prices back but I’m afraid there here to stay. I’m trying to go 3 years between upgrades if I can.

11. tiara6918

Posts: 2263; Member since: Apr 26, 2012

The only value for money phones at flagship level are the u11,5t,mate 10. The rest are overpriced and just copied apple's strategy. Not only do the prices get higher but now they take much longer to depreciate in value than they did before

19. meanestgenius

Posts: 21353; Member since: May 28, 2014

Flagships have become too expensive without offering enough innovation to justify the high price tags. Meanwhile, mid rangers are becoming more and more feature rich, with increasingly good designs, making it easier for people to bypass flagships in favor of them, or simply hold onto their current smartphone longer due to not enough wow factor in newer smartphones to justify an upgrade.

21. steved13

Posts: 6; Member since: Apr 03, 2013

My carrier, in Luxembourg, gave me for free the iphone 8 plus. It is a nice phone for sure but the asking price of 929€ is simply crazy when you can do exactly the same things with a much cheaper phone.

23. makatijules

Posts: 835; Member since: Dec 11, 2017

Good, because no phone is worth $1000 and if everyone sent a message by not buying them, the price will go down and never go back up. This goes for both Apple and Samsung. But especially Apple, because the iPhone X only catches up to phones we had 3 years ago, and those phones 3 years ago brand hew were not more than $800. Liek for example the Galaxy S7 edge which PA claimed isn't worth $800 Considering the Note 7 was $850, increasing storage, adding a camera and a new battery and other improvements do cost money, and those improves like cost more than $80. Also considering the device was boxed with premium headphones, and you got a choice of free gifts; more than justifies that price increase. But considering the Note 7 issues and how customers had to deal with it, some of us twice, they could have kept the price the same; and not given any free gifts. The improvements in today's phones are not significant for a price increase, especially apple adding $200/$300 in cost just to keep the same or better profit margin due to dropping sales. Samsung who at least makes other phones at other price points, will simply make most buy the cheaper options. $1000 even with device payment is ridiculous and I won't be buying the Note 9 if it remains the same price. I think $850 for a top tier device is fair. But the iPhone X certainly is not the top tier device considering it only cost $360 to make. The S7 cost Samsung $307 to make and yet it retailed for $750 and the edge was onlt $50 more. This is why its good to have multiple phones, because the lower costing devices, will make the up profit difference through volume sales. Not like Apple who prices high because you have only one choice. Even the iPhone 8 offered nothing to increase cost. The wireless charging coil is a $5 piece if hardware. Doesn't justify a $50 increase in cost and they didn't even provide a fast charger even though their device supports it, and no premium headphones either. At least Samsung offers all of it. Consumers need to send a message to these Bozo's. That we won;t buy your shizz when you charge outrageous unjustified prices.

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