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Smartphone shipments dropped 9% in Q2

Bad news about smartphone shipments has become the norm, rather than the exception, in recent years. The trend pre-dates the pandemic, but has only accelerated during the pandemic, thanks to various economic and supply chain impacts. Even so, a high single-digit drop warrants examination and some difficult questions around the industry’s health.
New figures out this morning from Canalys show a 9% year-over-year drop for global smartphone shipments in Q2. The culprits are, well, pretty much everything you’ve been hearing about for the last couple of years.
Says analyst Runar Bjørhovde:
Vendors were forced to review their tactics in Q2 as the outlook for the smartphone market became more cautious. Economic headwinds, sluggish demand and inventory pileup have resulted in vendors rapidly reassessing their portfolio strategies for the rest of 2022. The oversupplied mid-range is an exposed segment for vendors to focus on adjusting new launches, as budget-constrained consumers shift their device purchases toward the lower end.
Image Credits: Canalys
Consumers have broadly slowed down their upgrade cycles, as phones have gotten better and more robust. The phones themselves have grown more expensive in the process, adding an air of consumer caution amid economic uncertainty, including unemployment and inflation. Add to that chip shortages and supply chain bottlenecks, and you’ve got a recipe for an industry that has crashed back down to earth.
Given all of the above, it ought to come as little surprise that low-end and mid-tier devices have been driving what purchases remain. Most notable is Samsung’s A-series, which helped the company retain the top spot and grow its overall market share from 18 to 21%. Apple and Xiaomi effectively swapped market shares with 17 and 14% this quarter, as Apple took second place, propelled by demand for the iPhone 13.
Along with Xiaomi, fellow Chinese handset makers Oppo and Vivo also experienced market share drops for the quarter, at 1% apiece.
Smartphone shipments dropped 9% in Q2

Nothing Phone (1) review

Can a smartphone still be cool? They were, once upon a time, in those days when they were more luxury than ubiquity. But what happens when everyone has one — and, more to the point, we all pretty much have the same one? Phones aren’t fashion. They’re not clothes or shoes or even cars. Chances are probably roughly equal that you’ve got the same one as the world’s richest billionaire or the person who bags your groceries.
I won’t go so far as to say choice among smartphones is an illusion, but it’s also probably not as great as you think. The last several years have seen a consolidation of the market among a fleetingly small handful of companies, while once mighty brands like LG and HTC have fallen off. Add in geographical and carrier limitations, and it becomes clear how small a pool we’re ultimately swimming in here.
Nothing is a company founded on, among other things, the notion that smartphones can still be cool. That they can be exciting and interesting in an area where they’re more or less all similar touchscreen electronic slabs.
There’s never been a good or easy time to launch a new smartphone company. But in a number of ways, founder Carl Pei may have chosen the worst — or at very least, the most difficult. Along with the aforementioned consolidation comes an overall stagnation and decline in smartphone sales. After a decade of flying high, things came sputtering down to Earth. It’s a regression that pre-dates but was ultimately accelerated by the pandemic.
Image Credits: Brian Heater
Smartphone manufacturers painted themselves into a corner in a bid to beat the competition. In the process, devices improved to a point that people felt less compelled to upgrade as often. Differentiation grew more difficult and continued attempts to add features to outdo others drove flagship prices into the quadruple digits. It’s a paradox of sorts — smartphones may have gotten too popular for their own good.
Those factors presaged a massive supply chain crunch. Chips and other components have been increasingly difficult to procure at scale for companies not named Apple or Samsung, while external financial factors, including inflation, have driven up the price of consumer electronics. Anyone with a passing interest in the category will probably agree that the category could use some new life, but how one might go about supplying it is a different question altogether.
“Nothing has been a difficult company to launch,” Pei recently told me. “This industry, in general, has one of the highest barriers of entry. We have huge companies, and it’s consolidating. There are a handful of companies that are active, and huge companies tend to be pretty bureaucratic, slow moving and very analytical. No wonder why all the products are kind of similar these days. In a regular industry or product category, you also have fresh blood that keeps coming in from below. In our industry, there’s no fresh blood because the barrier to entry is so high.”
Other barriers exist, as well. That, after all, is precisely the reason Nothing isn’t bringing its first phone to the States. While American consumers have begun to recognize the appeal of purchasing unlocked devices, carriers still have a stranglehold on the market. “You have to work with a big carrier,” Pei added, “they have a lot of negotiation power over you.”
Nothing Ear (1) headphones were a fine way to test broader consumer interest. The earbud market, while still saturated, still has room for growth. And, besides, $99 for a pair of headphones from a brand-new manufacturer is a much easier ask than a smartphone — even a $400 one.
Image Credits: Brian Heater
In the meantime, the company has worked diligently to build out a brand. Pei’s biggest strength has been his ability to build community. It was a key piece of OnePlus’ early successes, and he’s doing his best to recapture that magic with Nothing. For the phone, that’s meant things like invite-only purchasing (something that happens to dovetail nicely with those supply chain issues), crowd equity investing and, yes, NFTs. Scarcity isn’t a concept one tends to think about when discussing a mass-produced product like a phone, but maybe there are lessons to be learned from crypto and hype beasts cultures.
Aesthetic consistency is another shortcut for building a brand. When we broke the news that the company was working on a phone back in March, we noted:
Details around the forthcoming device are thin, though the source notes that the product will share a similar design language and “elements of transparency” seen in Nothing’s first product.
It’s safe to say that the report bore out. The clear back, coupled with the “Glyph” LED lighting arrangement is, by far, the phone’s most striking visual element, sharing a language with Nothing’s transparent earbuds. Stripped of that aspect, it, well, looks an awful lot like an iPhone. “I’ve gotten that feedback,” Pei told me when I brought this up. “It’s the most efficient use of space.”
Is the current iPhone some platonic ideal of smartphone design? I guess it is until it isn’t, and someone else figures out something better. Perhaps this speaks to another kind of limitation: physical design and use of space. Sure, Nothing could have gone out of its way to produce something entirely different, but 1) good luck finding a manufacturer that will work with you and 2) you’re suddenly catapulting yourself in the world of function over form. There’s certainly some wiggle room to play with, but a phone needs to be functional first, and then you can start worrying about the other stuff.
Ultimately, when you choose utility, you’ve got to find other ways to stand out as a true alternative in the samey world of handsets. That’s the liminal space the Nothing Phone occupies. It’s a kind of thought experiment into how one can go about differentiating oneself in a product category that’s already so mature and well defined.
Image Credits: Brian Heater
One thing that’s undeniable, however, is that the form factor is solid. The combination of glass and metal, coupled with the heft of the device, affords the Phone (1) a premium feel. It’s not heavy — certainly not for a phone this size — so much as substantial. Build-wise, there was never point I felt like I was carrying around anything but a flagship.
The company determined that bleeding-edge specs weren’t the hill to die on, either. This much is understandable. Going head-to-head against Samsung and Apple in an all-out spec war is a game you’re going to lose. This is most glaringly obvious in the case of the chipset. The inclusion of the Qualcomm Snapdragon 778G+ chip puts the device firmly in the mid-range category. Like pretty much every other aspect of building your first phone in 2022, there are trade-offs.
I’d assumed the decision was largely budgetary. I suspect that still played a factor in the decision, but ultimately Nothing’s choice not to go all-in on the latest flagship chip was a bit wonkier than that. Pei said the decision to go with a TSMC fab — rather than Samsung — is what pushed it over the edge. “It was a difficult choice, because we knew there would be people saying, ‘hey what are you doing? It’s not the latest.’ But I think it’s the most responsible choice in the seven series.”
Performance-wise, the phone can hang. It performs well, particularly will those devices in its price range. Sure, there are trade-offs that come with not adopting this year’s latest flagship chip, but nothing that should have a profound impact on your daily use. The chips are coupled with a solid starting 8GB of RAM and 128GB of memory. There are three tiers, in all, ranging from £399 ($473) to £499 ($592) for 12GB/256GB — again, positioning the product in the mid-tier.
Image Credits: Brian Heater
It’s a good value — especially for a first-time phone. The resources required to launch a device like this are tremendous. Pei certainly alluded to the fact that a large portion of the company’s raise thus far is tied up in the Phone (1), making this phone’s success nearly make or break for the young company. For that reason, I wouldn’t have been entirely surprised if Nothing passed some of the financial burden along to the consumer.
Much like the spec conversation, pricing your product similarly to Apple and Samsung’s is a fool’s errand. Firstly, $1,000+ phone prices are one element that has throttled phone sales. Finding a better price point makes the product more competitive, and opens up additional markets like India, which tend to be more interested in mid-tier pricing (a big market for Nothing, as it happens). It’s likely no coincidence that pricing was also a key part of OnePlus’s strategy, as well.
The back is, meanwhile, the most unique design element I’ve seen on a handset recently, aside from foldable screens. Is it a gimmick? Yes, 100%. It’s a decent one, however, with some real functionality. It’s also the reason the device ships with a warning for people with epilepsy and light sensitivity. That’s not something you see with most handsets — and partially an indication of just how bright this thing gets at full power. The “Glyph” is made from 900 LEDs, covered by a diffusing layer that makes it look like one connected light source. The design is certainly unique. “They told me it’s the kanji character for ‘love,’” Pei told me about his design team. “But I call bullshit on that. I can’t see it.” It can be programmed for a variety of different notifications, but it takes some time to remember which is which.
Image Credits: Brian Heater
In the center is a 5W wireless charging coil. Choose “Power Share” from the drop-down menu, pop a pair of earbuds in the center and the ring will light up to let you know it’s doing its thing. The battery life overall isn’t head-turning, but the 4,500mAh battery will get you through a day and a half of normal use with no problem.
The OLED screen measures in at 6.55 inches. It’s a great-looking display at 2400 x 1080, with a smooth 120Hz refresh rate. The screen is on the larger side, which, in turn, makes for a larger phone. I’m on the taller side of the human spectrum and had no problem porting the handset around, but that could certainly be a limited factor for many users.
The 16-megapixel front-facing camera sits behind a hole punch in the display. It has a built-in night mode and is capable of shooting video in 1080. A pair of rear-facing 50-megapixel cameras sit atop each other on the rear, their respective housings creating a small camera bump. The overall quality of images is quite sharp, and the system has some built-in tricks, including the inclusion of a macro mode and clever use of the two cameras to double as a depth detector. Overall, it’s a solid implementation and an impressive showing for a first-time phone-maker.
Image Credits: Brian Heater
The device itself isn’t rated for dust or waterproofing. Pei told me that the decision to skip the official process came down to time. Each side of the product is covered in Gorilla Glass 5, which should protect against drops, and rubber elements inside the phone will — at the very least — help it deal with rain and splashes. I wouldn’t, however, go swimming with the phone just yet.
Nothing’s Phone (1) is a refreshing change of pace in a smartphone market that has lost much of its sense of fun. It’s not a revolutionary device — but marketing material aside, that was never really the point. It has to be a solid and reliable Android handset at its foundation, and on that front it’s a success. It’s novel enough to turn heads and service as the starting point for an interesting company.
But is it cool? That’s ultimately in the eye of the beholder. It’s definitely fun, functional and nice to look at. Too bad it’s not available in the U.S.
Nothing Phone (1) review

Why OSOM went web3

“I want to do some crazy stuff,” Jason Keats says with a laugh. “I want to bring back that GEM phone.”
He reaches behind him and pulls the strikingly slender device off a shelf. The battery’s dead, but as a prop, it still works. Essential released images of the prototype device in October 2019 — roughly four months before the company closed its doors. All that remains now are a handful of devices and the dreams of some of its co-creators like Keats, who would go on to found OSOM a few months after Essential’s demise.
“It’s a new way to interact with your device,” Keats explains. “It actually worked really well one-handed with a big screen, a quality camera. It was so easy to use. And the length allowed us to have a good diversity of antennas inside the device, even though it was a small form factor.”
Image Credits: Essential
OSOM’s first phone, unveiled late last year, shares more design DNA with Essential’s first handset, the PH1. From a pure hardware design perspective, it’s not especially adventurous. Keats notes, as an aside, that people have stopped him on the street to ask whether it’s the iPhone 14 while he’s using it.
“Our first product needs to be a more traditional device,” OSOM’s co-founder/CEO explains. “You can’t be like, ‘here’s a crazy brand with a crazy thing.’ You’re gonna sell like five.”
So the Bay Area company went for a far more straightforward design with the OV1. It’s a premium flagship, devoid of the glitz of, say, Nothing’s first product. It is, among other things, a pragmatic framework on which the firm can execute future experiments — a sign of a serious company selling a product on serious concerns like user privacy.
As we discovered last month, however, the OV1 will never see the light of day. In its place comes the Saga, a device branded by blockchain startup, Solana, that offers the promise of a web3-first mobile experience. It is, effectively, the OV1 with a slightly different paint job (one of Solana’s requests was the addition of green buttons to match the company’s branding) and the blockchain company’s web3 software stack.
Image Credits: OSOM
Keats says he was introduced to Anatoly Yakovenko through a mutual friend when the Solana Labs CEO explained that the company was looking for a hardware maker to bring its dream of a blockchain-focused mobile device to life. The pair chatted over Signal and met over coffee a week later.
“We realized there were such parallels between our fields and our visions for the future that meshed,” Keats says. “He needed someone who could build hardware and arrange for it to be manufactured, who knew the players in Asia to actually build a quality device. We needed a user and a customer base that was excited about consumer choice, self-custody and individual privacy.”
Keats won’t disclose specifics of the deal, only explaining that suddenly OSOM has far less concern about its future. “They’re our exclusive launch partner, and there are certain MOQs (minimum order quantity) that are involved in it. They’ve made an investment in the company that guaranteed our future.”
The deal finds the already-delayed device’s release moving from Q4 of this year to “early 2023.” With the additional months ahead of release, OSOM opted to improve the camera sensor and bump up the RAM and storage, from 8/128GB to 12/256GB. Those numbers came with a price increase, pushing the device from the earlier promise of “well under” $1,000 to right around it.
Image Credits: Solana
“I said, look guys, first device, sell it for $1,000 and show that you’re selling a $1,600 phone for $1,000,” Keats explains. “That says a lot about what we’re willing to do. We’re trying to build that community, and building a super premium phone. The other side of that is it leaves us a window to do a lower cost version in the future.”
OSOM’s decision to partner out of the gate is understandable. The U.S. phone market was regarded as nearly impossible to crack well before sales figures began dropping. Launching a new handset from a new mobile company seems like a recipe for disaster. Essential — with its pedigree and hype — reportedly sold fewer than 90,000 units its first year in existence.
Keats cites Nothing founder Carl Pei’s knack for building an organic fanbase as inspiration for OSOM’s attempts to break into the U.S. market (Nothing, too, is betting on crypto/web3 in a big way). The promise of a privacy-focused handset with good specs and vanilla Android sounds good, but does all of that add up to product that can truly differentiate itself in a mature and saturated market place whose sales have consolidated among a few big players?
Image Credits: OSOM
A crypto-focused deal differentiates the product in a crowded market without a radical Hail Mary like the GEM design, which can then be served up to Solana’s loyal fanbase. Keats says striking a deal wasn’t make or break at this early stage, but certainly gives OSOM a lot more breathing room than it might have otherwise.
How long the exclusivity deal with Solana will last isn’t clear. And while there’s some concern that focusing so heavily on the crypto market will serve to pigeonhole the product out of the gate, Keats notes that users can uninstall the Solana stack if they’re just looking for a new Android device without all of the web3 stuff. Availability will be limited at launch, regardless, as the companies focus on getting the product in developers’ hands. More general availability will follow later.
“In the next month or two, they’re gonna announce some pretty fun stuff for their developers and for early adopters,” Keats explains.
As for the future, alongside the wacky form factors, one can look toward various patents Essential was granted in its short life. The list includes several focused on imaging, including the drive to create an under-display camera that doesn’t suck.
“Some of [the patents] we own now,” says Keats. “The ones I cared about belong to OSOM. And we’ve filed 20 or 30 at this point, as well.”
Why OSOM went web3

New report examines the number of downloads it takes to hit the top of the App Store

New analysis indicates it’s gotten harder to get an app to the top of the App Store, in terms of downloads, over the past several years. According to new data from app intelligence firm Sensor Tower, the number of downloads needed for an app to break into the No. 1 position on Apple’s iPhone App Store in the U.S. has climbed by 37% since 2019. Specifically, it estimates an app now requires approximately 156,000 downloads on a given day to hit the top spot, up from 114,000 daily downloads back in 2019.
But to be clear, downloads alone don’t move an app to the top of the charts. It’s only one of several factors that Apple’s ranking algorithm takes into account for managing its Top Charts.
Image Credits: Sensor Tower
In the early days of the App Store, Apple soon realized that downloads alone would give developers an easy way to buy their way to the No. 1 spot.
It then expanded its ranking algorithm to make it more complex — and more of a mystery. Another firm, Apptopia, believes it has reverse-engineered the current version of this algorithm, which is said to consider numerous factors like velocity, app usage, quantity of new users and more.
That said, downloads are still a part of the equation here, and an interesting factor to examine, given how little information there is about how Apple’s App Store ranks actually work.
Among the new findings, Sensor Tower noticed that Apple appeared to have adjusted the ranking algorithm to address the impacts of the COVID-19 pandemic in 2020.
It reports that in 2020, the number of downloads it was taking an app to hit No. 1 on the U.S. App Store hit a record high of 185,000, up 62% year-over-year. That would be in line with the overall boost seen in app downloads and usage that was occurring as consumers stayed at home under government lockdowns, while schools, stores and workplaces closed.
Getting to the same position on Google Play was easier at that time, however, as the number of daily downloads required grew just 5% year-over-year to reach 87,000 in 2020.
Image Credits: Sensor Tower
Since then, the number of daily downloads needed to reach No. 1 has declined on both marketplaces as post-COVID trends (or rather, post-lockdown trends) have normalized app usage.
This year, Sensor Tower estimates apps must reach a median of 156,000 daily installs to reach No. 1 on the App Store, as noted above, but Android apps now need just 56,000 installs, down 33% from the 83,000 required in 2019.
Breaking into the top 10 on the U.S. App Store also requires more effort than hitting that same position on Google Play.
Per the report’s findings, it now takes approximately 52,000 daily downloads to get into the Overall Top 10 on the App Store, up 2% from the 51,000 required to reach the Top 10 in 2019. But Android apps only need 29,000 daily downloads, which is down 9% from 2019 levels.
Image Credits: Sensor Tower
Image Credits: Sensor Tower
Still, these figures are approximations reached from trends across the respective app stores.
When looking at figures in more detail on a per-category basis, there are different trends to be found. For instance, on the App Store, it’s tougher to break into the Top 10 free iPhone apps for those ranked in the Entertainment category than others like Shopping, Social Networking, Travel or Finance. Android is similar in that it also sees Entertainment as needing more daily installs, but this is followed by the Shopping, Tools, Finance, then Communication categories.
Image Credits: Sensor Tower
Image Credits: Sensor Tower
It’s worth pointing out that these trends only hold true for mobile apps, not mobile games. That’s an entirely different matter.
When looking at mobile games, Sensor Tower found iPhone games now require a median of 93,000 downloads to hit No. 1 while Android games need 37,000 installs. These figures are down from 2019 levels, dropping by 46% and 68%, respectively.
The report also notes that, historically, it’s taken fewer installs for games to get into the Top 10. So far in 2022, iPhone games have needed 26,000 daily downloads to reach the Top 10, down 40% from 43,000 in 2019. And Android games needed just 16,000 daily installs, down 52% from 33,000 in 2019.
While much of the new report is focused on the U.S. market, Sensor Tower did examine how the U.S.’s Top 10 compared to other countries.
Here, it found that it’s much tougher for non-game apps in China to reach the Top 10 — requiring more than twice the number of daily downloads as in the U.S. at 108,000 (China) versus 52,000 (U.S.)
But on Android, it’s India that is the most difficult market to top, requiring 292,000 daily downloads to reach the Top 10 in the free charts for non-game apps.
Image Credits: Sensor Tower
Image Credits: Sensor Tower
While the data here is worth investigating, this analysis doesn’t take into account the other factors apps and games require to climb the charts, so it’s not a complete picture of how or why apps can climb to the top of the app stores.
In addition, there have been some hints that Apple may have been adjusting its algorithms even more in recent weeks, as bigger apps like Facebook, Netflix, Snapchat and others have taken ranking hits since around mid-April, Apptopia told us last month, when we inquired how relative unknown apps had been finding their way to the Top 10. This could be a test or a more permanent change meant to give smaller apps a chance to stand out and be discovered amid the tech giants, but more time will be needed to conduct that analysis.
Still, this sort of tweaking could help to highlight a variety of apps that are benefitting from marketing, promotions, and other trends. This might explain why Planet Fitness is No. 2 on the Top Free Charts in the U.S. today, for instance — the company gave teens free gym passes for the summer. Meanwhile, DIRECTV’s recent consolidation of its apps has driven it to No. 3, while the newcomer social networking app LiveIn, popular among teens, is now sitting higher than Facebook and Snapchat at No. 7.
New report examines the number of downloads it takes to hit the top of the App Store

Samsung reportedly cutting smartphone production by 30M

All is not well in smartphone land. The industry was headed for a slowdown well before SARS-CoV-2 entered the picture. The glory days of expanding markets and bi-annual upgrades are seemingly at an end, and things have only been exacerbated by two years of financial hardships and supply chain constraints.
For all these reasons, it’s not surprising that manufacturers are pulling back on manufacturing. A new report from South Korea’s Maeil Business News has the world’s leading smartphone maker ramping production down by 30 million units for 2022. The news comes as sales are further hampered by the conflict in Ukraine. In March, the company followed fellow tech giants Microsoft and Apple by suspending sales in Russia.
Apple, too, has been feeling the pain. Recent Bloomberg reports noted that the iPhone maker is throttling plans to manufacture an additional 20 million phones in 2022. Instead, its numbers are reportedly going to remain flat from 2021. Those reports follow several quarters of iPhone sales that had managed to buck many of the industry’s macro trends, but the company might be coming back down to Earth, even with the imminent arrival of the iPhone 14.
It’s a perfect storm of industry and global factors that have gotten us to this place. It’s not panic time for the larger manufactures — they’ll almost certainly come out of the dip unscathed. But there are broader questions that remain about the industry going forward. Biggest of all is whether this is a lull following a decade of explosive smartphones sales, or whether not even the arrival of new technologies like foldable screens will kickstart a return to the mobile golden age.
Samsung declined to comment on the reports.
Samsung reportedly cutting smartphone production by 30M