2018 was an eventful year for the global smartphone market. We saw the usual flurry of new devices from the likes of Apple, Google and Samsung; we saw rumors and news stories about 5G devices, and we saw players such as Huawei, Xiaomi and OnePlus shake up the market, addressing consumer demands for lower priced devices, with more innovation.
Device protection becomes a priority
As the price of smartphones has risen, insurance for these devices has become more necessary. Consumers will often reluctantly insure their smartphones, knowing that a decision not to insure a brand-new device might be one they regret.
But the current insurance model is outdated—if a consumer doesn’t insure their device at point of purchase, then they essentially forfeit device insurance. The current insurance model also doesn’t take into account the depreciating value of devices—and consumers often resent paying a premium for protection of their two-year old phone. Lastly, the current models are “one size fits all”, regardless of the consumer’s risk profile.
In 2019, we expect to see a shake-up to the smartphone insurance model. With smartphones reliable for so much more than just calling and texting, a model that works better for consumers is needed. We’ll begin to see different insurance models come to market—models that allow consumers to insure their devices for a period of time, like when they go away on holiday, or offers them a solution if they break their smartphone screen, and need insurance on the spot.
Outside players want in
Our own research showed that this year, consumers are holding onto devices longer than ever—and in fact, are holding onto their devices for almost three years before they upgrade to a new one.
There are a number of factors that are contributing to this. First, the increasing cost of smartphones means that consumers are reluctant to upgrade as often as they have previously—especially when a device can have a $1000+ price tag. Secondly, consumers perceive the features in newer devices as not differentiated enough to shell out the money for them.
This means that players such as Huawei, OnePlus and Xiaomi are beginning to shake up the market. Huawei, for example, has become a global player, and has been using the UK market to spread its presence worldwide. In fact, Huawei has captured 15% of the global market, second only to Samsung and ahead of Apple.
These players are offering an alternative to the market leaders, often including very similar features, for a fraction of the price.
Over the next 12 months, if Apple and Samsung want to reign supreme, then they will need to innovate and provide incentives, such as trade-in, for consumers to upgrade to newer devices.
Overcoming the 5G hype
There was a lot of hype last year over the launch of 5G devices, which are rumored to hit the market in 2019. These devices are reported to have foldable screens to offer immersive video experiences. They’re also said to be bigger than any devices we’ve seen to date.
There’s a lot of different takes on what the devices are going to look like, and how much they’re going to cost (recent news puts OnePlus’ first 5G device at costing between $200 - $300 more than its recent OnePlus 6T device).
But in reality, 2019 is just too early to know what real 5G devices will look like and be priced at. 5G networks are still in development—and while we may see some initial 5G networks rolled out in 2020, 5G won’t be deemed mainstream until 2025. Which means, other than for early adopters, we have some way to go before we begin trading in our devices for a shiny, 5G smartphone.
The enterpRISE of trade-ins
Mobile device trade-ins are now mainstream for consumers. We’ve seen a shift from consumers abandoning their smartphones to the back of a drawer, and we are seeing more and more consumers trading in their old devices, and using these to offset the cost of a new device.
But the enterprise hasn’t adopted mobile device trade-ins in quite the same way. While there are some more concerns that businesses may have that consumers don’t have to worry about—such as sensitive business data—there is a way for enterprises to trade-in their devices while ensuring their data stays safe (in fact, you could argue that leaving unused devices in a cabinet in an office presents more of a risk than trading in those devices).
Over the next 12 months, we’ll see more enterprises maximizing the benefits of enterprise trade-ins, securely trading in unused devices, and using these to offset the cost of new devices for the enterprise.
Balancing the hype in 2019
We often like to think that every year the smartphone industry will go through a period of dramatic change. But in reality, we won’t see this kind of transformation—not until we truly see the advent of 5G devices. Instead, we’ll see new players take advantage of the opportunities that exist, and we’ll see existing players maximize trade-ins to ensure they are getting the most from their pre-owned devices.