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Will Apple’s new iPhone kick-start a moribund mobile phone market?

With just under a week to go before Apple launches its new iPhone the press has been awash with stories suggesting that the phone will have a number of new features and Siri, Apple’s voice assistant, appears to be taking centre stage.

Despite the expected media storm, there is a perception among consumers that the pace of technological evolution has slowed in the mobile space and that is having an impact on sales.

According to figures from IBC mobile phone sales in 2017 are expected to be ahead by just under 2 percent. Just a few years ago sales were racing ahead by over 50 per cent, so that represents a significant slowdown. Four key markets – the US, China, Japan and the UK – have all seen slow or flat growth in the past year.

A combination of factors seem to be at play. Phone replacement has slumped in the UK since 2013, for example. Back then consumers were buying new mobiles every 20 months.Today, according to retailer Dixons Carphone, they are now buying a new handset every 29 months. Price is also an issue – which isn’t surprising when the new iPhone is expected to retail at £800, it appears that many consumers don’t see the value in upgrading their phone.

People are holding on to handsets for longer and are being put off by what they see as only incremental changes to phone technology, whether that’s improvements to the phone’s camera, software of screen size.

Phone makers are getting anxious and even the launch of Apple’s next iPhone is not expected to set the mobile world alight.

There does seem to be some light at the end of the tunnel, however. Research has found that the advent of 5G, the next generation of superfast mobile connectivity, is expected to encourage consumers to head out and upgrade their phones – although 5G wont be available until 2020.

As for the handsets themselves, since the advent of the touchscreen in 2007 innovation has slowed. Bigger screens and the megapixel camera have helped but many mobile companies are now pinning their hopes on augmented reality (AR) as the next big technology that will help drive sales.

AR is coming to iPhones and Google recently released new software for top-end Android phones.

Will any of this work to reignite the moribund mobile phone market? It’s too soon to say, but it’s unlikely, at least in the short-term, that we’ll see a technology dominate and drive the market in the way the iPhone’s full touchscreen has over the past 10 years.

Neil Tyler

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