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July 4, 2014

UK mobile phone sales to plummet 11% in 2014

Device slowdown hits as country reaches saturation point.

By Ben Sullivan

Demand for smartphones and tablets in the UK has slowed dramatically, with five million fewer devices expected to be sold this year than in 2013.

CCS Insight’s latest forecast also reveals that mobile phone sales dropped 20% in the first few months of 2014 compared with the same period in 2013.

Tablet sales, which had broke all records in previous quarters, fell 17%.

Marina Koytcheva, director of forecasting at CCS Insight, said: "The slowdown in tablet sales should come as no surprise to the industry. We warned back in December that the spectacular tablet growth we’ve been seeing in the last two years was unsustainable. With replacement rates for tablets slower than those of smartphones, a temporary lull was inevitable."

A recent Gartner report found that as adoption of mobile devices becomes wider, it is expected that consumers will buy lower end hardware with improving specs, such as Tesco’s Hudl, leading to a lower overall spend.

But CCS Insight’s research indicates that with over 25 million tablets already in use in the UK, many being used by more than one person in a household, the number of tablets in use could double by 2017 as more people and businesses buy the devices.

The replacement sales of mobile phones has also declined, with consumers having little reason to upgrade.

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The forecast pointed out that this is happening despite the fact that many network operators have already started to offer 4G at no premium over 3G, less than two years after the first 4G services were launched in the UK by EE.

Ben Wood, Chief of Research at CCS Insight, said: "This is a double whammy for device manufacturers. No one anticipated we’d see so much pressure on both tablet and smartphone sales at the same time. In response to slowing sales consumer electronics companies will be tempted to step up their marketing efforts and spoil buyers with a wealth of attractive promotions and bundles.Early signs of this have already emerged, with cheap tablets or wearables being thrown in with a smartphone sale to sweeten the deal."

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