Consumers are upgrading their phones at lower frequencies.

[Note: Years 2023-2026 is a predicted trend according to CellSell.com [1]](https://embed.deepnote.com/e9f6b291-248e-48b1-8778-64682f99d8ec/c926fda69e854edbb147b1e22bec4120/87bfeb4ea7be4eb594c07353e920ff5b?height=547)

Note: Years 2023-2026 is a predicted trend according to CellSell.com [1]

The average worldwide replacement cycle for a phone peaked in 2013-2015 at 2.4 years / upgrade. In 2023, it is currently 3.6 years / upgrade. This is 50% longer than the global peak in 2015.

People are holding onto their current phones for longer.

[Source: Counterpoint Research [2]](https://embed.deepnote.com/e9f6b291-248e-48b1-8778-64682f99d8ec/c926fda69e854edbb147b1e22bec4120/4699fa436814457ebcdc6dd276e1215e?height=547)

Source: Counterpoint Research [2]

We can also see this reflected in global smartphone shipments from 2011-2023. The graph reflects years of very strong growth from 2011-2016, a peak in 2017, and a gradual leveling off and decline into 2023.

<aside> 💡 Note that there was a small increase of ~60 million phones from 2020-2021, likely reflecting the combined effects of a Covid bump (when consumers were stuck at home and not spending on services / vacations) and an iPhone supercycle (beginning in October 2020 with the launch of the first 5G iPhone 12).

</aside>

Because of these trends, I believe in the near to medium term smartphone sales will no longer be a growth sector and the main growth will be derived instead from increase in:

• Services spend per user.
• ASP (average selling price) per handset.
• Sales of ecosystem devices that pair with smartphones (premium headsets, smartwatches, and laptops / tablets).

I may take a look at these two trends in the future to see if these factors are enough to overcome the decrease in the trend of total shipments of smartphones we have observed.