The mobile device market was worth $439 billion with shipments of 1.15 billion and an installed base of 3.37 billion worldwide in 2020. It’s a massive global market under constant change – of which mobile phones accounted for 84% of the spend in 2020. Leading European (Nokia, Ericsson, …) and Japanese (Sony, NEC, …) phone suppliers have now entirely gone away to be replaced mainly by by American (Apple), Chinese (Huawei, Xiaomi) and South Korean (Samsung) ones, who proved capable of handling the scale economies and innovation needed to succeed (see my Figure above). The constant design challenge with mobile devices is how to fit the latest rich features into small battery-powered form factor. One of the most important features is 5G wireless connectivity, which has been beset by unprovable accusations by Western governments that Chinese suppliers will share private data with their government. The sanctions introduced by the US under president Donald Trump stopped 5G component suppliers from selling microprocessors to Chinese mobile device manufacturers and brands. In turn this has led to shortages of these chips and a big reduction in the sales of devices by Chinese vendors.
Beyond these political effects let’s have a look at the long term trends. In my Figure above I show the annual shipments of mobile devices by form factor. The biggest shift has been from basic/feature to smart phones, with the latter more successful by around 200m shipments when comparing smart phones in 2015 to basic ones in 2007. Audio devices such as iPods, smart tablets (iPads) and smart wearables (iWatchs) have all been successful, but reaching their shipment peaks miles short of those of the two mobile phone types.
All of the current operating systems running on mobile devices are from US companies, with Google’s Android being the most important. Apple’s iOS is in a very strong second position – very impressive for a single vendor. Microsoft’s WIndows Mobile is the next strongest currently, although past its peak and declining.
My Figure above shows 2020 market shares for vendors and device types by revenue and for vendors by unit shipments. The biggest change over 2019 was the decline of Huawei and other Chinese suppliers and the growth of Samsung.
For the future it will be very important for all vendors to address climate change challenges in
- replacement/recycling,
- the mining and use of rare metals,
- minimising the use of fossil fuel and water in product manufacturing and in
- global distribution.
I won’t be the only one willing to pay more for a – perhaps locally produced – device with less features from a supplier with a better-than-average strategy to address these issues. However for the moment the shape and direction of this market will continue to be driven by global scale economies, curtailed by government intervention.