Mobile World Congress 2018

Phone makers battle declining sales with camera software, rugged cases and quirky style

After suffering the first sales decline in nearly 15 years, mobile phone companies are trying to stand out by offering unique features, or joining the latest arms race: advanced photography software and artificial intelligence

PUBLISHED : Tuesday, 06 March, 2018, 8:47pm
UPDATED : Tuesday, 06 March, 2018, 8:47pm

Are we reaching what is known as “peak phone”? Analysts at Gartner last month revealed that global sales of smartphones saw the first year-on-year decline since the firm began tracking the international market in 2004. The 5.6 per cent decline over the fourth quarter of 2016 suggests demand for mobile handsets worldwide may have levelled off.

Another Apple analyst predicts weak growth in iPhone sales this spring

Five years ago it was common to change your device every six months, perhaps even more often, as brands jostled for market share using exciting new features.

All new designs, ever bigger sizes and increasingly good cameras have led to where we are now; all smartphones now look the same. Inside, too, they’re virtually indistinguishable. So when did you last change your smartphone?

“Replacement smartphone users are choosing quality models and keeping them longer, lengthening the replacement cycle of smartphones,” says Anshul Gupta, research director at Gartner.

“Moreover, while demand for high quality, 4G connectivity and better camera features remained strong, high expectations and few incremental benefits during replacement have weakened smartphone sales.”

Despite – and because – of this slowdown, the market has seen the rise of mobile phones that break away from the norm. A good example would be last year’s Nokia 3310. With just a 2.40-inch, 240x320 display and a two-megapixel rear camera, the 3310 has done remarkably well in mature markets over the past 12 months, catapulting Nokia (or rather, the brand’s new licensee, another Finnish company called HMD Global) back into the global top 10 phone manufacturers.

The brand will try to repeat that success with the Nokia 8110, or the “banana phone”, which launched at this year’s Mobile World Congress (MWC) held in Barcelona last month.

And Nokia is not alone – there were other models shown at the world’s biggest mobile phone trade show that boasted the kind of features no mainstream phone offers: a tough touch screen, a saltwater-proof chassis, and a bigger battery.

Joining the likes of the Blackview BV7000 Pro, Zebra TC75x and Doogee S60, are the newly-launched Energizer Power Max P600S, RugGear S61, and Land Rover Explore.

But rugged phones are only ever going to have niche appeal. More of a battleground for smartphone makers is software, and in particular, artificial intelligence (AI). AI is about all new kinds of software, largely to introduce advanced photography techniques.

“Software is becoming more important for smartphones, because they have a physical lack of optics, so we’ve seen the rise of computational photography that tries to replicate an optical zoom,” says imaging analyst Arun Gill, senior market analyst at Futuresource Consulting.

This is largely about making the effects and capabilities of more advanced DSLR cameras available to more people at the touch of a button. It uses algorithms rather than optics, but the big brands are still using better cameras to sell phones.

In fact, only two major new phones were launched at this year’s MWC; the Samsung Galaxy S9 and S9+ and the Sony XZ2, and both came with dual cameras and intriguing photography software.

The Samsung S9+ launch was billed as “the camera reimagined”, with its large aperture camera (it swaps between f1.5 and f2.4) thoroughly impressing in the fading light of early evening Barcelona. So too was its super slow-motion option that captures 960 frames per second, though that’s possibly a niche feature.

How Samsung went from No 1 to also ran in China’s smartphone market – and can it bounce back?

Not to be outdone, the very next morning Sony unveiled an almost identical feature set with its new flagship phone the XZ2, though adding an ability to film video in 4K HDR quality.

It’s obviously getting tough to make a phone stand out.

“The camera is one of the ways in which smartphone brands are trying to differentiate,” says Gill. “We’re now seeing dual lens cameras and triple lens cameras, but in terms of hardware we’ve probably reached the limit because adding even more optics to smartphones isn’t practical – software will play a more significant role in mobile photography in future.”

We’ve been here before; the megapixel wars.

“Cameras are again becoming a highly competitive point of differentiation at the high end, although this time it is not about pixel count, but taking images in low light, super slow motion capture, 4K HDR capture, optical image stabilisation, wide angle lenses, and quality partner brands,” says David McQueen, research director at ABI Research.

It’s all about trying to stand out, but it’s proving a vicious circle for smartphone makers.

“For Samsung to keep competing with Apple and other rivals, it needs to keep differentiating its core features and services … but this is getting harder and harder to achieve in the smartphone market,” says McQueen.

“New features at the high end, such as edge-to-edge displays, biometrics, and AI are all being used by its competitors.”

What smartphone you carried used to say a lot about you as a person. Now it means just one thing; like the rest of us, you’re waiting for the next big thing.