Has smartphone innovation reached the end of the road?

The coronavirus impact has led to cratering demand for smartphones. Things have become so bad Samsung, the biggest smartphone maker in the world, considered ditching its Galaxy Note line next year.

Analyst Gartner’s sales reports for the industry have made bleak reading in 2020. In the first three months, demand for smartphones dropped 20pc.

The trend continued in the second quarter, with sales again dropping 20pc compared to the same period in 2019. It was only in the third quarter when the drop slowed, leaving sales down 5.7pc for the quarter.

Dropping smartphone sales can’t be written off as being caused entirely by the pandemic. Instead, the slowdown began years ago as customers began to hang on to phones for longer.

“The life cycles have been extending now for two or three years already,” says Roberta Cozza, a senior director analyst at Gartner. “The market was already struggling because we’ve been seeing extending life cycles.”

There are widespread worries in the industry that simply upgrading the camera, screen and battery of devices every year isn’t enough to convince customers to upgrade. “It’s not enough,” says Ben Wood, chief of research at CCS Insight. “In the UK, [the fact] people typically keep their phones for at least three years is testament to the fact people are looking at phones and saying ‘I don’t need to spend any more money on this now.’”

Networks and phone makers also face an uphill struggle in convincing customers to spend £800 for a device that can connect to 5G, a technology that is still being built across the UK.

Earlier this year, the UK 5G Innovation Network estimated 5G coverage extends to 10.8pc of London and is as low as 2.3pc coverage in Liverpool. Analyst Enders estimates that the roll-out of 5G has been half as fast as the launch of 4G networks.