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Smartphone shipments declined for the first time in 2017

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Photo by James Bareham / The Verge

2017 was the first year that smartphone unit shipments didn’t grow, according to venture capitalist Mary Meeker’s annual Internet Trends report. Shipments actually declined by 0.5 percent, as IDC noted in February. In 2016, shipments were lukewarm at 2 percent yearly growth, but this downturn is significant.

Among smartphone shipments, Android and iOS have all but completely pushed out every other mobile operating system. And despite the growing price of today’s top flagship devices, the average selling price of a smartphone has steadily fallen over the years.

As more of the world now owns smartphones, growth has basically stalled. Similarly, internet user growth has only grown 7 percent in 2017, compared to 12 percent in 2016.

Image: Mary Meeker’s Internet Trends Report

More people are accessing the internet than ever, on an average of 5.9 hours a day. And they’re browsing on mobile, indicating that they’re just holding onto older models of phones instead of buying new ones.

Consumers aren’t incentivized to buy new phones when they all look similar and the market is saturated with used phones in good condition. Smartphone companies can only differentiate themselves right now by advertising, instead of trying to win people over with better specced devices.

While the decline of the smartphone industry isn’t new, Meeker’s report illuminates how people are now accessing the internet, and offers other analysis like naming the world’s top 20 biggest internet companies, with Apple in first place, followed by Amazon. Alibaba clocks in as the world’s sixth biggest tech company, and China’s biggest, followed by Tencent.

The report also highlights tech companies’ current plight with data privacy. Companies usually rely on data to improve app experiences, but scrutiny is rising on how that data is handled, so companies have entered into a “privacy paradox.”