Mobile Phones in the US

PROSPECTS

Smartphone penetration is unlikely to keep growing

Smartphone penetration in US households reached an all-time high of 278% in 2018, leaving little room for growth for manufacturers. To counter the decline, manufacturers focused on more premium products that were sold at higher prices.

Wireless carriers change the market

In 2013, major US wireless carriers began phasing out a system in which the cost of new smartphones was bundled together with the cost of customers’ wireless service in the form of two-year contracts. This payment model usually gave customers a subsidised price for the phones, but it also locked them into two-year service agreements with the carrier.

Feature phones are positioned as a solution to smartphone addiction

For almost a decade, sales of smartphones have cannibalised those of feature phones. However, many American consumers are wary of how much time they spend on their smartphones, and frequent media stories about how addictive these devices can be has only exacerbated concerns.

COMPETITIVE LANDSCAPE

Politics affect smartphones

Chinese smartphone manufacturers Huawei and ZTE have faced intense scrutiny from the US Department of Commerce for years. In 2018, it became clear that these companies would not have a chance to compete in the country.

Local brands try to make a difference

Whilst Apple and Samsung remain the strongest manufacturers of smartphones in the US, a number of small US companies are working to carve out their own shares. Essential Products and BLU Phones, for example, both manufacture unlocked phones, which allow consumers to select any wireless service carrier.

New launches of feature phones

HMD Global, the parent company of Nokia, plans to reintroduce Nokia branded phones similar to those that became iconic in American culture before the smartphone era. This new generation of feature phones will be smarter than its predecessors, however.

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