UK Smartphone and Tablet Sales Hit by Slowdown in 2014

Buying a phone shopping trolley illustrationDemand for smartphones and tablets in the UK has slowed dramatically, with estimates showing that 5m fewer devices will be sold in 2014 compared to 2013.

According to research by CCS Insight, mobile phone sales have dropped 20 per cent in Q1 of 2014, compared to the same period in 2013, while tablet sales also slumped by 17 per cent. This is the sharpest decline in sales outside a recession that the UK market has seen.

The report did have some good news for device manufacturers, predicting that the number of tablets in use would double by 2017 as more people and businesses adopted the devices. Currently, 25m tablets are in use across the UK, many of them being used by more than one person in a household.

“The slowdown in tablet sales should come as no surprise to the industry,” said Marina Koytcheva, director of forecasting at CCS Insight. “We warned back in December that the spectacular tablet growth weve been seeing in the last two years was unsustainable. With the replacement rates for tablets slower than those of smartphones, a temporary lull was inevitable.”

More worryingly, the report shows that sales of replacement mobile phones are slowing, with consumers upgrading less regularly as the pace of innovation declines and the growing number of SIM-only deals meaning people are more likely to stay with their current model beyond their contract.

The drop in sales will see competition intensify in the second half of the year, the report predicts, with wearables and the replacement of older PCs, neglected during the tablet boom, eating into consumers budget for electronics.

“This is a double whammy for device manufacturers,” said Ben Wood, chief of research at CCS Insight. “No one anticipated wed see so much pressure on both tablet and smartphone sales at the same time.

“In response to slowing sales consumer electronics companies will be tempted to step up their marketing efforts and spoil buyers with a wealth of attractive promotions and bundles. Early signs of this have already emerged, with cheap tablets or wearables being thrown in with a smartphone sale to sweeten the deal.”