TIME TO UPGRADE YOUR OLD PHONE? MORE CONSUMERS SAY, ‘NOT YET’

Global smartphone shipments fell nearly 9% in the second quarter, as inflation worries outweigh the urge to get the latest phone

The global smartphone market is taking a breather.

With inflation lifting the cost of daily necessities like gasoline and food, many phone owners are sticking with their current models longer, according to industry executives. Companies are making fewer phones and fewer phone parts, and they are planning for a further rough patch ahead.

China’s Xiaomi Corp., the world’s third-largest smartphone maker after Apple Inc. and Samsung Electronics Co., said Friday that it shipped 26% fewer smartphones in the April-to-June quarter compared with a year earlier, and smartphone-related revenue fell 28% to the equivalent of $6.2 billion.

Xiaomi cited shrinking consumer demand in China, which had pandemic-related lockdowns in the quarter, as well as rising food and fuel prices around the globe.

In the same quarter, worldwide smartphone shipments declined nearly 9% compared with a year earlier to 286 million units, according to research firm International Data Corp. The biggest drag on the market was China, but the U.S. and most other regions were also weaker, IDC said.

Sean Mullee, a 23-year-old economist in Washington, D.C., recently moved to the capital from Ohio and said he found the cost of living high, especially now with inflation running at more than 8%. Mr. Mullee, who has an iPhone X he got a couple of years ago, said he wasn’t planning to upgrade for now.

“When your car breaks down, it’s like, ‘OK, well I need a car, so I have to go get one.’ But until then, I’m going to keep putting it off,” he said.

The situation has changed from the first two years of the pandemic, when people staying at home were using their phones more. In that period, demand was strong and the biggest problem for the industry was the supply chain, which was hit by shipping delays, Covid-19 lockdowns and a shortage of semiconductors. Those issues haven’t gone away but are gradually easing.

“What started out as a supply-constrained industry earlier this year has turned into a demand-constrained market,” said Nabila Popal, an analyst with IDC.

The slowdown isn’t uniform. Sales of smartphones priced above $900 grew more than 20% in the first half of this year compared with the same period a year earlier, according to Counterpoint Research. The segment includes Samsung’s foldable smartphones and many of Apple’s latest iPhones.

Only about one in 10 smartphones globally fell into that premium category in the first half of the year, but it accounted for 70% of industry profits, Counterpoint said. Canalys Research analyst Runar Bjørhovde said wealthy consumers aren’t as bothered by the higher cost of daily expenses and still want to have the latest phones in their pockets.

On the flip side, some big carriers are seeing more subscribers default on their payments as inflation takes a bite out of household finances. “Naturally they’re not going to see people buying new phones if they can’t even pay for their phone subscriptions,” said Mr. Bjørhovde.

Samsung introduced budget 5G models in March, a move it said was aimed at stimulating demand, while it is also pitching foldable phones that cost as much as $1,800 in the premium market.

Apple, which is expected to roll out the latest versions of its iPhone in September, benefits from being primarily a high-end brand, but there are signs that it can’t rest easy.

The biggest iPhone assembler, Foxconn Technology Group, said this month that it saw slowing demand for smartphones, as did Qualcomm Inc., a chip supplier to Apple and others, in July.

Apple supplier Taiwan Semiconductor Manufacturing Co., a leader in advanced smartphone chips, said recently that its smartphone business is no longer its biggest revenue generator. The No. 1 spot is now held by high-performance computing chips that are used in applications such as graphics processing and autonomous driving.

China, which accounts for nearly a quarter of global smartphone shipments, is at the centre of concerns about global demand.

From July 29 to Aug. 1, Apple took the unusual step of discounting its iPhones in China and running ads online advertising the sale. It knocked the equivalent of nearly $100 off the price of its iPhone 13 Pro Max and 13 Pro models.

Wang Xiang, the president of Xiaomi, alluded to a similar situation on Friday when reporting the company’s weak results, including a 67% drop in net profit. “Due to the weak market demand, we are trying various ways to clear our inventory, which has caused a decline in profit,” he said.

Zhao Haijun, co-chief executive officer of Shanghai-based Semiconductor Manufacturing International Corp., said he saw some companies involved in making smartphones or smartphone parts suddenly cutting orders.

“That triggered a panic in the supply chain,” Mr. Zhao said on an investor call this month.

Feng Xiao, a 37-year-old sports-event organiser based in Shanghai, echoed Mr. Mullee in the U.S. when asked whether she was planning to upgrade her phone. “My iPhone 12, which I’ve used for about two years, is still just fine,” she said.

Analysts said they thought demand would likely start to improve later this year or next year and the people who say they are happy with their phones would eventually get restless. That assumes there won’t be major global disruptions such as a deepening of the U.S.-China conflict over Taiwan or a new surge in inflation.

“We continue to believe that any reduction today is not demand that is lost, but simply pushed forward,” said IDC’s Ms. Popal.

—Jiyoung Sohn contributed to this article.

Luke Michel has already lived through two technology overhauls in his career, first desktop publishing in the 1980s and online publishing later on. But AI? He’s had enough.

So when his employer, the Dana-Farber Cancer Institute, made an early-retirement offer to some staff last year, the 68-year-old content strategist decided to speed up his exit. Before, he had expected to work a couple more years.

“The time and energy you have to devote to learning a whole new vocabulary and a whole new skill set, it wasn’t worth it,” he said.

It isn’t that he’s shunning artificial intelligence—he is learning Spanish with the help of Anthropic’s Claude. But, at this point, he’s less than eager to endure all the ways the technology promises to upend work.

“I just want to use it for my own purposes and not someone else’s,” he said.

After rising for decades and then hovering around 40% in the 2010s, the share of Americans over 55 years old in the workforce has slipped to 37.2%, the lowest level in more than 20 years.

The financial cushion of rising home equity and stock-market returns is driving some of the decline, economists and retirement advisers say.

But for some older professionals, money is only part of the equation.

They say they don’t want to spend the last years of their career going through the tumult of AI adoption, which has brought new tools, new expectations and a lot of uncertainty.

Many people retire when key elements of their work lives are disrupted at once, said Robert Laura , co-founder of the Retirement Coaches Association and an expert on the psychology of retirement.

“Maybe their autonomy is being challenged or changed, their friends are leaving the workplace, or they disagree with the company’s direction,” he said.

“When two or three of these things show up, that’s when people start to opt out.”

“AI is a big one,” he adds. “It disrupts their autonomy, their professionalism.”

Michel, whose work required overseeing and strategizing on website content, has been here before.

When desktop publishing arrived in the 1980s, he was a graphic designer using triangles and rubber cement.

The internet’s arrival changed everything again. Both developments required new skills, and he was energized by the challenge of learning alongside colleagues and peers.

It felt different this time around. “Your battery doesn’t hold a charge as long as it used to,” he said.

He would rather spend his energy volunteering, making art, going to operas and chairing the Council on Aging in North Andover, Mass., where he lives.

In an AARP survey last summer of 5,000 people 50 and over, 25% of those who planned to retire sooner than expected counted work stress and burnout as factors.

About half of those retired said they had left work at least partly because they had the financial security to do so.

In general, older Americans are less likely than younger counterparts to use AI, research shows.

About 30% of people from ages 30 to 49 said they used ChatGPT on the job, nearly double the share of those 50 and older, according to a 2025 Pew Research Center survey of more than 5,000 adults.

Baby boomers and members of Generation X also experienced the sharpest declines in confidence using AI technology, according to a ManpowerGroup survey of more than 13,900 workers in 19 countries.

“We as employers aren’t doing a good enough job saying (to older workers), we value the skills that you already have, so much so that we want to invest in you to help you do your job better,” says Becky Frankiewicz , ManpowerGroup’s chief strategy officer.

Jennifer Kerns’s misgivings about AI contributed to her departure last month from GitHub, where the 60-year-old worked as a program manager.

Coming from a family of artists, she said, it offends her that AI models train on the creative work of people who aren’t compensated for their intellectual property. And she worries about AI’s effect on people’s critical-thinking skills.

So she was dismayed when GitHub, a Microsoft-owned hosting service for software projects, began investing heavily in AI products and expecting employees to incorporate AI into much of their work. In employee-engagement surveys, the company had begun asking them to rate their AI usage on a scale of 1 to 5.

When it came time to write reports and reviews, colleagues would suggest that she use ChatGPT.

“I’d be like, ‘I have no idea how to use that and I have no interest in using AI to write anything for me,’” she said.

It would have been more prudent to work until she was closer to Medicare eligibility, she said. But by waiting until her children were out of college and some of her stock grants had vested, the math worked.

Her first act as a nonworking person: a solo trip to Scotland, where she took a darning workshop and learned how to repair sweaters.

“The opposite of AI,” she said.

Employers already under pressure to cut workers—such as in the tech industry—may welcome some of these retirements, said Gad Levanon , chief economist at Burning Glass Institute, which studies labor-market data.

“The more people retire, the fewer they have to let go,” he said.

Some of the savviest tech users are also balking at sticking around for the AI upheaval. Terry Grimm, who worked in IT for 40 years, retired from his senior software consultant role at 65 last May.

His firm had just been acquired by a bigger firm, which meant learning and integrating the parent company’s AI and other tech tools into his work.

Until then, Grimm expected he might work a couple more years, though he felt that he probably had enough saved to retire.

“I just got to the point where I was spending 40 hours at work and then 20 hours training and studying,” said Grimm, who has since moved with his wife from the Dallas area to a housing development on a golf course in El Dorado, Ark.

“I’m like, ‘I’ll let the younger guys do this.’”

TIME TO UPGRADE YOUR OLD PHONE? MORE CONSUMERS SAY, ‘NOT YET’

Their careers spanned the personal computing, internet and smartphone waves. But some older workers see AI’s arrival as the cue to exit.