How close to saturation is the smartphone?

The US is not the market where penetration is highest. However, it is the largest market where we have reliable penetration data (from at least two sources) and the one where penetration is near the top of the range.

The graph showing the US ranked against others as of a year ago is here. The US was cited at 56.4% at the time. I keep track of comScore’s data and it showed 58.2% at the end of March and 55.3% at the end of January, making the figure very believable.

The most recent data from comScore shows penetration at 68.8%. In order to understand what the limits of that growth could be it’s important to see the longer-term pattern. It would show whether there is a clear point of inflection and thus a predictable “saturation” around an asymptotic value.

The following graph shows the percentage of smartphone users/non-users since late 2009.

Screen Shot 2014-05-08 at 5-8-6.13.29 PM

The following graph shows the rate at which users are being added to the smartphone ranks (measured as new users per month.)

Screen Shot 2014-05-08 at 5-8-6.14.01 PM


To summarize, the conversion of users from non-smart to smartphone usage is fairly constant. The March ’14 period saw 2.8 million new-to-smartphone users. the March ’13 period saw 3.0 million, the March ’12 period saw 2.0 million and March ’11 saw 3.0 million. There is no discernible slowing of adoption.

Note that I added a trailing three period average in new users which fluctuates somewhat predictably due to seasonality. Finally, note that the figure of 50% penetration was reached almost two years ago and no noticeable change of adoption has happened since. Cellular phone ownership in the US is still rising (though very slowly) and it now about 90%.

The only conclusion is that even at the current 68.8% penetration, we are not anywhere near “saturation” of smartphone users in the US, and the US is a leader among “developed markets” so there is little to suggest that saturation has happened anywhere with significant populations.

  • stsk

    I’m a little concerned about the use of “saturation” as any kind of meaningful metric. It strikes me as being one of those measurements which doesn’t indicate what the casual observer will take it to mean. e.g. most will believe the theoretical maximum of 100% is a solid wall, which indicates the end of growth in sales, and, in fact the end of sales, period. This is not the case. While there is no opportunity to capture “virgin” buyers after “saturation”, that’s only a small portion of sales now – and far far from the only portion. i.e. “Saturation” was reached in my household years ago, but since that date 10 “new” smartphone purchases have taken place. These are replacement purchases, but that doesn’t account for cross-purchases i.e. dissatisfied Android users switching to iOS (I don’t use the reciprocal because statistically that almost never happens, other than with comment trolls), and it also doesn’t indicate cross-purchasing of hardware within the Android ecosystem.

    While penetration is one measure, it’s not close to being an important one.

    • obarthelemy

      Is there data somewhere about ecosystem switchers ? I’m seeing only one CIRP Apple vs Samsung buyers study ?
      That study
      1- shows 20% switching Android to Apple, 8% switching Apple to Samsung, which is not “never” but more than a third, and
      2- probably not representative because ex-iOS customers are probably more interested in shiny casings, ie HTC or Sony not Samsung.
      3- I’m unclear if that study is US-only or more representative.

      Penetration is not a perfect surrogate for sales, but when approaching saturation, several things change: longer renewal cycles unless innovations continue/accelerate (not seeing that for any actual jobs, except cameras ?), product ownership can be assumed (remember when we made the switch from paper to Word résumés ? This time around, payment ?), buying criteria evolve (ease of switching brands or ecosystems…), and I’m sure I’m missing several.

      But, again, the main driver for sales is not where we’re at re: penetration, but the competitive position of competing devices. That’s redefined on a yearly basis w/ product launches…

    • MarkS2002

      Well, my son went from iPhone to Galaxy and is delighted with the screen size. I have a G2 and it is not even a good phone; but I really find our 500 peso Nokia the most reliable. Other than phoning and a camera, the old iPad answers all my other computer needs.

  • Wouldn’t that Dec ’11 bar indicate an inflection? What does the chart look like as trailing-12-months bars?

  • Given that there will be a time when smartphones will be less expensive to make and operate than feature phones – smartphones are certain to achieve 100% penetration wherever phones are used, so the closer we get to that time the less meaningful the penetration data becomes.

    That, however, is not the same as saying that a significant or measurable proportion of the market is leveraging the full value of (or even all of the aspects under which) the phones they have might be productively employed. A comparison how disparate markets actually USE their smartphones would appear a likely candidate for delivering more interesting (if not more useful) information.

    (And I can’t think of anyone more capable of nor credible at such a task than Horace Dediu).

  • Bruce_Mc

    A more interesting question to me is how long it takes humanity to adjust to the smartphone, or any other new technology. I don’t know how this would be measured.

    Just guessing I’d say humanity has adjusted to agriculture and literacy already. The world was on it’s way to adjusting to industrialization but perhaps has not completely done so, unless wars are considered an inescapable byproduct of industrialization.

    Now we have pervasive networked computing to adjust to. We may still be in the clay tablets or steam engine phase of adoption, long before governments, religion, and day to day personal life have experienced and adjusted to the full effects of the smartphone and related technologies.