Report: U.S. mobile market added 'paltry' 139K new connections in Q2

Report: U.S. mobile market added 'paltry' 139K new connections in Q2

Summary: Android's piece of the pie is surely growing, but how much bigger is the pie itself getting?

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At least one tech consulting group is disappointed in the way the U.S. mobile market is looking as of the second quarter of 2013.

Chetan Sharma and his global technology and strategy consulting group went so far as to speculate, Is the smartphone growth over?"

Before we get to the dramatics, let's take a look at some of the key numbers:

  • Smartphones are now past the 60 percent penetration mark in the United States, continuing to "sell at a brisk pace."
  • Smartphones accounted for nearly 87 percent of mobile devices sold during the quarter.
  • Approximately 240 million consumers account for 335 million mobile subscriptions. Still out of that pool of 240 million, roughly 145 milion of them own smartphones.
  • The U.S. mobile market added a "paltry" 139,000 new connections during the quarter -- down 95 percent from Q2 2012.

On the mobile provider front, analysts framed T-Mobile as the darling of the quarter being that it both led the industry last quarter for new subscribers and posted one of its best growth rates in 12 quarters.

As for the nation's top two, AT&T sold more iPhones, but Verizon sold more smartphones.

So what gives? Perhaps the problem can be found more at the OEM and operating system maker levels rather than with the service providers.

Looking back at the stagnancy seen during the quarter, Sharma reiterated in the report published on Tuesday that "it is no longer good enough to have a great product, an OEM needs to perform well across multiple variables."

We all know the Android ecosystem as a whole is performing better consistently quarter to quarter, dominating the market share -- at least from an operating system standpoint.

It used to be Apple that was the OEM performing well across both the OS and manufacturer charts.

But without a new iPhone or iPad in sight (regardless of unconfirmed rumors), it could be argued that Sharma's assessment applies directly to the Cupertino company.

He also noted:

The global market is even more fertile. The emerging markets are quite price sensitive and the low-cost Android devices are rushing to fill the void. If Apple cares about market share, it will have to figure out a strategy to address the void in its portfolio.

Topics: Mobility, Smartphones, Tablets, Telcos, Tech Industry

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3 comments
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  • actually

    You need to get it of the box... The pie isn't just the US anymore!
    slickjim
  • Feature phones to smartphones

    It would seem that since the number of subscribers isn't increasing, the only opportunities for smartphone sales are upgrades at the two year or less point and replacing feature phones of which are as many as 120 million (40 % of 240 to 335 million, I used 300 million). The cost to change from a feature phone to a smartphone is high. On my grandfathered VZW family plan it will cost $200 plus $360 a year for my wife to get a iPnone or an S4. The value just isn't there for her since I have a smartphone. If I upgrade to the Share Everything plan with 4 GB which would be equivalent to the old plan with 2 GB for each smartphone, it would cost $600 a year more plus $200 for the phone. As it is she loves her slider LG with camera and micro SD card for her pictures and doesn't want a new phone even though she is eligible. IMO unless the service providers can figure a way to reduce smartphone costs, the future customer growth isn't going to happen except through population growth. There has likely been a large feature phone growth in the prepay market due to Oboma phones.
    Old EE
  • The report above makes no sense...

    So, the number of connections or subscriptions to the service providers was merely 139k last quarter, and yet, the conclusion drawn above is that, it's the fault of the device makers?

    A person first has to decide to subscribe to a service, and then he/she needs to decide on a device, smartphone or simple feature phone. If people aren't subscribing for new services, how is that the fault of the smartphone makers? Is the smartphone supposed to be the reason that people sign up for a service, or should the service come first, followed by the decision on the device type and make?

    Also, perhaps saturation is already setting in, as far as the need for services, and with the need for services going down, the smartphone market will be directly affected and directed towards a major slowdown. It could be that, most people who wanted smartphones and cell-service, already have it, and they don't have a need to get any more of either. Hmmm.... Sounds that "problem" sounds vey familiar.... Wait! I think I know where I heard that before. People aren't buying as many new PCs as they used to, because, what they already have is good enough, and now, it's the same situation with smartphones.

    And no, cheap smartphones is not going to convince those that don't already have a smartphone, to get one. The biggest expense with having a smartphone is not the device itself; it's the cell-service. So, even if they devices were to be very cheap or "free", the cell service would still be very costly, in the 3rd world countries, and even in the more developed areas. Not every family can afford a cell plan that cost between $200-$400 per month, where those people would end up spending more on their cell-phones and plans, than on food (as I saw reported a couple of weeks ago).

    We might be closer to smartphone/mobile service fatigue than most people, especially the tech bloggers, want to admit.
    adornoe