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A saturated U.S. smartphone market

As the U.S. smartphone market reaches its saturation point,1 the Bing Network’s search data reflects a shift in shopping behaviors for smartphone devices.

Apple and Samsung have the lion’s share of the U.S. market and are essentially trading off share between one another quarter over quarter.2 Because the market is nearly saturated, relying on innovation as a differentiator may not be enough to sway customers.1

Edward Baig at USA Today refers to the recent slump as an “innovation hiatus.”3 Not only are there fewer drastic yearly breakthroughs, but many of the new features do not make a difference or are barely noticeable to customers.3 Smartphone commoditization also makes it difficult to justify premium price points.3 The ability to adapt to new strategies is paramount to a marketer’s success.

Shoppers are holding on to their smartphones

With innovation stalled, recent models have failed to excite audiences like they used to, according to Dan Hays, partner at PriceWaterhouseCoopers.4 “There hasn’t been a great reason to upgrade,” Hays said in USA Today.4 “Bigger screens, more memory and higher resolution cameras have largely failed to engage masses in spending thousands to replace phones.”4 Even lower priced mid-range phones are delivering enough advanced features to satisfy most consumer daily needs.2

Recent surveys by Barclays indicated that 45% of individuals did not plan to trade in their device this year.5 Consumers are showing less interest in the latest models and more interest in previous generation models.5 In mid-October, it was announced that in its first month on the market, the iPhone 8 was being outsold by the iPhone 7.6 According to data from Consumer Intelligence Research Partners, Q1 sales reports reflect the iPhone 8 is selling more like an iPhone ‘S’ model.7

The implications for search advertisers

Bing Network search trends reflect this shift in consumer behavior when shopping for new smartphone devices:

  1. General interest of the latest iPhone is flat compared with last year’s model:
    This year’s iPhone 8 and iPhone X post-announcement search volume was relatively flat compared to last year’s iPhone 7 post-announcement volume.8
  1. Searches for previous models increase during the launch of the newest model:
    The graph below represents this year’s iPhone 8 launch and how traffic for the iPhone 7, iPhone 6s and iPhone 6 also increased in the post-iPhone 8 announcement period.9 Overall, searches for the three previous generations of iPhones increased by 12% after the announcement.8
  1. Searchers are seeking smartphone deals in greater numbers:
    Shoppers display price-conscious behavior: From 2015 to 2016, searches related to “iPhone sale” terms rose by 30%.10 Those same queries rose by almost 70% in 2017.10

Tips to target smartphone shoppers

Closely monitor keyword performance to ensure coverage across new releases and older devices by taking advantage of Bing Ads Keyword Planner. Making the sale will be more difficult than before, given the increase in competitive strategies and shifts in consumer behavior.

Brands should consider strategically expanding budget to emphasize older mobile devices because search volume increases for older models when new models are announced. Ensure that Bing Shopping Campaigns are fully implemented with a diverse product feed that includes all makes, models and price points.

Use remarketing tactics to better position the brand for consideration as prospects near the end of the purchase journey. For example, include messaging around upgrade or trade-in programs to incentivize and retain existing customers.

Respond to deal seekers during the holiday season by showcasing price-conscious product offerings or ad copy promoting payment installment programs. This approach is used by cell phone carriers to make certain makes and models more accessible. These methods remind prospects of easy payment offerings that can alleviate the burden of premium pricing.


2017 is a big year because it is widely viewed as an inflection point for handset manufacturers. As Apple enters its 10th year selling iPhones and Samsung rebounds from the Galaxy Note 7, there is an opportunity for other brands to step up and compete in the space. With a nearly saturated market experiencing diminished innovation growth and a trend where consumers are looking to previous models for lower prices, marketers need to respond differently.