Mobile device sales grow 7.4% in Q1 2018

Smart phones, tablets and wearable computers are now the dominant client devices. There were over a billion of these ‘installed’ (if we can use the term for a mobile device) by the end of March compared with 846 million PCs. However we’re in a transition phase in terms of product transitions, with smart phone and tablet sales declining before smart wearable and IoT devices take up the slack (see my Figure for a forecast to 2025).In Q1 2018 revenues of all mobile devices (including basic mobile phones) grew 5.6% to $81b, units were down 0.8% to 324m. Although the total installed base declined 2.8%to 3.2b, the equivalent of half the population of the earth has one of these (even if there is a surfeit of these devices among relatively rich Westerners). In the year to the end of March shipments dropped 0.3% to 1.4b, while revenues were up 3.2% to $336b.

The big winner of this market is Apple, who’s $167b revenues in the year accounted for 49% of revenues in the year (see my Figure for market shares in revenue, units and installed base)- the equivalent of receiving $26 from everyone in the world ($38 each if you include its other offerings). Apple’s products are more expensive than most and Samsung sold more, giving it a 26% share of unit shipments and 21% of the installed base.

Perhaps the biggest long term champions of the mobile device market are ARM Holdings who’s chips are used in almost all of these products and companies such as Motorola, Google and Microsoft (alongside Apple and Samsung) who hold thousands of patents which require licenses payments by the active suppliers (even if many of them are no longer major suppliers themselves).

This is now a mature market; each new ‘smart’ device (currently the wearables and IoT devices) peaks a long way short of the original growth of either basic or smart phone. There is room for some geographic expansion in Africa and South America, but in general suppliers will make their money from selling new products to replace those already in use. Luckily for them there are constant developments in mobile communications (such as 5G), which require new hardware, while the constant development of chips, SSDs, displays, batteries and operating systems expand the potential for new form factors and enhanced functionality.