Samsung recently rolled out the latest iteration of its new Galaxy S9 smartphone to mostly positive reviews.
Unfortunately, the preorders for it don’t look that great and provide further evidence of a slowdown in global smartphone sales:
In a new report, analyst Jeff Johnson of the boutique firm Arthur Wood Research cited supply-chain sources who say preorders for Samsung’s new Galaxy S9 smartphone are down 50% over the Galaxy S8, which was released at the same time last year. Samsung unveiled the S9 at Mobile World Congress in Barcelona last week. (See our Harry McCracken’s review here.)
Johnson writes that phone buyers are “upgrading at a much slower pace as features are falling on deaf ears.” This is a frightening prospect for companies like Samsung Electronics that rely on sales of phones and phone components for much of their revenue.
“Smartphone sales are starting to decline at an accelerating rate,” Johnson writes. This same general phenomenon is the likely cause of disappointing iPhone X sales after an initial surge of purchasing immediately following that phone’s launch. And Apple is, arguably, even more exposed to a softening smartphone market than Samsung is.
I wrote a post on this topic a few days ago after news of disappointing iPhone X sales, and I think the slowdown in preorders of the S9 is helping to cement my thesis of a global smartphone slowdown. The US in particular is completely saturated with the devices, and with many of the upgrades being much more marginal than they were five years ago, fewer and fewer people see any real need to upgrade.
It’ll be interest to see if Apple and Samsung are able to avoid the fate of Microsoft in the face of this slowdown.