Smartphone Average Price Sees Record Year-on-year Growth in 3Q17

Global smartphone demand reached 367 million units in 3Q17, up 3% year-on-year. This is the highest 3Q tracked by GfK, in terms of absolute demand, despite moderate growth.

The record demand was primarily driven by Latin America (up 11%) and Central and Eastern Europe (up 9%). Global average sales price (ASP) continued to increase in 3Q, rising by a record 7%.

“Although unit sales may be down in some regions, the increase in ASP reveals the fantastic opportunity to grow the value of the smartphone market. This is welcome news for manufacturers, particularly in regions such as Western Europe where saturation has resulted in declining volumes. The industry has clearly been switching its focus to drive sales value, and top tier global brands either already have, or will release, new premium models in an effort to upsell customers to their flagship devices,“ said Arndt Polifke, global director of telecom research at GfK.

Smartphone demand totaled 30.9 million units in 3Q17 in Western Europe, down 7%. The combination of the saturated market and delayed launch of the iPhone X has led to a decline for the fourth consecutive quarter. Demand in Germany is set to decline by 7% and both Great Britain and France are expected to experience an 8% fall. However, sales value in the region rose 4%, driven by an 11% increase in ASP.

As a result, GfK raised its 2017 smartphone revenue outlook for the region to 6%. The shift towards very high end devices is a clear trend in this region, with one out of eight smartphones sold in this quarter priced above USD 900, compared to one out of 16 in 3Q16.

Smartphone demand continues to recover in Central and Eastern Europe, with a 9% increase, bringing demand to 22.3 million units. Sales value, however, increased at a faster rate of 26%. The improvement in the region’s demand in 3Q17 is mainly due to strong growth in Russia (up 10%) and the Ukraine (up 19%). The outlook is also positive, with 2017 smartphone demand forecast to grow 9% to 85.2 million.

In North America, smartphone demand totaled 49.3 million units in 3Q17, down 1%. This represents a return to decline, following growth in 2Q. However, the outlook for 4Q17 is positive, as major product releases have been announced for this quarter. GfK forecasts 2017 smartphone demand to total 201 million units, a growth of 1% year-on-year.

Smartphone demand in Latin America reached 27.8 million units in 3Q17, a rise of 11%. Demand in Brazil remains the driver of this sterling regional performance. Brazil experienced a 17% increase in demand in 3Q17 compared to the previous year. GfK has raised its 2017 forecast for Latin America to growth of 9%.

Smartphone demand totaled 45.2 million units in the Middle East and Africa, up 8%. In China, smartphone revenue is up 20%, while demand in develped Asia reached 16.4 million units, down 7%. In emerging Asia, smartphone revenue increased 21%, while demand increased 5%, reaching 57.7 million units.