Have we reached peak smartphone and what does that mean for marketers?

Kleiner Perkins’ Mary Meeker’s highly anticipated kitchen-sink compendium of third-party stats dropped (June 06, 2018). Amidst the barrage of data was the following: global smartphone shipments grew zero percent in 2017. Many others have already pointed to this observation with some mixture of surprise and alarm.

Meeker also cites data that the average selling price of smartphones is declining. That’s largely a function of the need to produce lower-cost devices for developing markets. So does all this mean we’ve reached “peak smartphone?” If so, what does that mean for marketers?

In the US, the Pew Research Center found that 95 percent of US adults now have mobile phones and 77 of those people have smartphones. That leaves roughly 17 percent who have yet to “upgrade.” Most of those people tend to be older (above 50). The smartphone penetration rate is 85 percent and above for those under 49. This data directionally seems to confirm the Meeker observation.

The Pew data suggests some growth is possible among older users in the US. However, the most sought-after consumer segments (18- to 49-year-olds) are near saturation. Therefore, the battle there is for “switchers” and upgrades.

A contrasting data point cited by Meeker is that internet penetration has reached about 50 percent of the global population, making growth harder to find. This leads inevitably to a half-empty, half-full interpretation. I would argue that while the remaining opportunity is not 50 percent, it’s also not 10 percent. Accordingly, there is room for new internet users — and the majority of those will likely be smartphone users first and foremost.

Another bit of positive news is that time spent with digital media continues grow, and smartphones continue to dominate that time. Time spent accessing the internet through smartphones saw incremental growth compared with flat to declining growth for desktop and laptop computers. Specifically noteworthy in the chart below is growth in time spent with smart speakers (other connected devices).

So where does all this leave us, and how should marketers respond? In one sense, there’s nothing to see here. I would submit the following:

• There’s still meaningful global headroom for internet growth, which will be via smartphone.
• The US market is near smartphone saturation, but usage has not peaked.
• Time spent with digital media will continue to grow on non-PC devices: smartphones, smart speakers and other connected devices.
• Most digital ad revenue growth is coming from mobile, and that will continue into the foreseeable future.
• Revenues at Google, Facebook, Amazon and other large publishers are increasingly mobile.
• Future e-commerce growth will be driven more by mobile than the PC.
• Social commerce will be dominated by mobile.

You may not agree with all of these bullets, but among the various digital platforms and channels, mobile will be dominant for the foreseeable future, although smart speaker and smart displays will see more growth, coming from a smaller base.

Marketers must therefore continue to focus on smartphones as the primary internet device. That means simplifying and improving mobile user experiences for customers — especially as a loyalty tool. The bottom line is this: There’s no reason to change course. Everyone must still optimize for mobile; that’s where growth and opportunity remain.

About The Author

Greg Sterling

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.