IFA 2018: Global Smartphone Market Goes Large for Premium Priced Devices

With the bar of consumer expectation about what smartphones can do constantly rising, smartphones remain the key personal device, according to GfK. In the first half of 2018 a total of 693.5 million smartphones were sold globally. The total revenue amounted to €215.3 billion, which is an increase of three percent compared to same period in 2017. Consumers show a clear trend towards premium devices, resulting in an increase in the average selling price by four percent.

Telecom Retailers and Consumer Electronics Shops remain the most influential channels for the telecom market internationally. Online channels are growing in popularity due to convenience, cost savings and improved product feature descriptions. Although sales through the traditional channels clearly dominate, online sales accounted for 15 percent of all sales in the first half of 2018. While presence in the traditional retail is important, creating a global consistent ‘digital’ retail presence is becoming increasingly important as well.

Although the demand for smartphones is more or less stable in unit terms, the mobile phone industry continues to be strong and resilient including the trend towards premium devices. Also, with growing consumer preference for social responsibility, the environment, and fair trade, these consumers won’t buy a new smartphone if the old one is doing all right. While there is a tendency towards prolonging lifecycles, consumers are willing to pay premium as long they see improved features or other benefits, and as a consequence demand is shifting to premium priced devices.

With smart features growing in popularity there is increasing opportunity for voice controlled user interfaces based on big data and artificial intelligence. Emerging customized voice assistant technology allows embedded branded AI capability to be used across smart home devices under one branded look and feel. Also, the combination of voice assistants with new sensors to capture gestures offers further promising possibilities. Smartphones with improved connectivity, multiplayer gaming, and virtual, augmented, as well as mixed reality are further enhancing the way consumers can interact with each other.

The weight of developing countries matters globally. Developing Asia including India plus the Chinese market weigh in with about 41 percent of all smartphone purchases internationally in the first half of 2018 and, APAC remains the largest region internationally.