Mobile Phones in the US

TRENDS

In 2017, the US saw overall decline in mobile phones for the third straight year, as total volume sales dropped by 1% to 162 million. This top line decline is in spite of – not because of – smartphone sales; volume sales of smartphones actually edged up by 1% over the course of 2017. However, smartphones has continued to cannibalise sales of feature phones, which has carried on its long, slow slide into something between a niche category and total obsolescence. Volume sales of feature phones dropped by 19% in 2017, and because the absolute decline in feature phone unit sales was greater than the absolute gain in smartphone unit sales, overall mobile phone volume sales in the US contracted.

COMPETITIVE LANDSCAPE

LG Corp remained the dominant manufacturer of feature phones in the US in 2017, accounting for 54% of volume sales. The only other company to exceed a 5% volume share was Samsung Corp, which held 31% in 2017. Both LG and Samsung have benefited from other companies abandoning declining feature phones. However, neither LG nor Samsung were immune from the overall slide in feature phone sales, as the companies’ unit sales dropped by 15% and 16%, respectively, over the course of 2017.

PROSPECTS

The most significant challenge facing the mobile phone industry in the US is increasing saturation. 2017 represented the third year in a row of total mobile phone volume sales in the US experiencing year-on-year decline, as feature phone sales continued to fall and smartphone sales plateaued. The manufacturers have mostly come to grips with the fact that mobile phones, which has been responsible for so much of the volume sales growth in the consumer electronics landscape over the decade to 2017, is now a mature category with only limited growth potential.

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