Smartphone market up 6.6 percent year-on-year in 2016

Smartphone market up 6.6 percent year-on-year in 2016

Foto: Fotolia

GfK reports that the global smartphone demand totaled 391 million units in 4Q16, up six percent year-on-year. North America returned to growth in the final quarter of the year, spurred on by flagship device launches and aggressive operator promotions. Despite strong demand in Great Britain during Black Friday promotions, sales in Western Europe fell four percent year-on-year in 4Q16.

Smartphone sales 4Q 2016 vs. 4Q 2015

 

Units sold (in million)

Sales value (in billion USD)

 

4Q15

4Q16

Y/Y % change

4Q15

4Q16

Y/Y % change

Western Europe

40.4

38.6

-4%

16.3

16.2

-1%

Central and Eastern Europe

20.9

24.2

16%

4.3

5.6

30%

North America

56.2

58.0

3%

21.9

22.9

5%

Latin America

29.9

32.3

8%

7.1

9.8

38%

Middle East & Africa

41.5

41.9

1%

10.3

10.7

4%

China

106.6

118.9

12%

33.7

36.9

9%

Developed Asia

19.8

20.5

4%

12.3

13.6

11%

Emerging Asia

53.3

56.8

7%

8.5

9.8

15%

Global

368.6

391.2

6.1%

114.4

125.5

9.7%

Source: GfK Point of Sales (POS) Measurement data in 75+ markets, December 2016

Based on GfK’s Point of Sales data, smartphone demand totaled 1.41 billion units in 2016, in line with GfK’s previously projected figures. Looking ahead, GfK forecasts global smartphone growth in 2017 to moderate to five percent year-on-year, with total demand reaching 1.48 billion.

In Western Europe smartphone demand totaled 38.6 million units in 4Q16, down four percent year-on-year. In Great Britain, demand was strong during November’s Black Friday promotions. However, this was not enough to offset 10 percent year-on-year declines in both Germany and France in the quarter. In 2016, the region saw a three percent fall in demand year-on-year, bringing sales for the year to 131.6 million units. GfK forecasts flat year-on-year demand in Western Europe in 2017, as the overall region reaches saturation.

In Central and Eastern Europe smartphone demand totaled 24.2 million units in 4Q16, up 16 percent year-on-year. Due to improving political stability, Ukraine saw an impressive growth of 34 percent year-on-year. In Russia, currency stablization was the leading catalyst for improving smartphone demand, pushing sales up 10 percent year-on-year. GfK forecasts smartphone demand to reach 84.4 million in 2017, a rise of eight percent year-on-year.

Following a dip in 3Q16, the North American market saw a turnaround in demand in 4Q16. This was driven by operator promotions and flagship devices launches, both coinciding with the holiday season. Smartphone demand hit 58 million units, an increase three percent year-on-year. GfK forecasts that tough competition between the carriers this year will drive marginal growth in smartphone demand of one percent year-on-year, totaling 193.4 million units in 2017.

Smartphone demand in Latin America region reached 32.3 million units in 4Q16, building on the turnaround which started in 3Q16. This is up eight percent year-on-year. Brazil’s improving political and economic situation heralded a gradual recovery in demand during 2016, with November posting the first year-on-year increase in demand of the year. Argentina demand remains strong, with 4Q16 up 38 percent year-on-year. In 2016, demand across the region is down one percent year-on-year. However, GfK has an optimistic outlook for 2017, as demand in Brazil continues to grow after two years of economic downturn.

In Middle East and Africa smartphone demand totaled 41.9 million units, up one percent year-on-year. This was weighed on by macroeconomic weakness in Saudi Arabia, Nigeria and Egypt. However, GfK forecasts year-on-year smartphone demand growth in the region to accelerate in 2017, helped by expected economic improvements.

In China, smartphone demand totaled 118.9 million units in 4Q16, up 12 percent year-on-year. The 4G smartphone user base hit 57 percent by the end of the year, driven by operator subsidies. Having penetrated the highly populated urban areas, 4G is now expanding to smaller cities and rural areas, as 2G and 3G users are encouraged to upgrade. GfK expects four percent year-on-year growth in 2017, bringing sales to 467.9 million units.

Overall smartphone demand in developed Asia totaled 20.5 million units in 4Q16, up four percent year-on-year. South Korea saw impressive growth of 17 percent year-on-year, helped by increasing demand for mid-range smartphones. However, like Western Europe and North America, the region is saturated and GfK expects smartphone demand to fall two percent year-on-year in 2017 to sales of 72 million.

Smartphone demand in emerging Asia totaled 56.8 million units, up seven percent year-on-year, a slight slowdown from 3Q16. Demand in India grew five percent year-on-year, with strong Diwali sales in October partially offsetting the negative impact of demnetization. GfK has a positive outlook for the region for 2017, with smartphone demand expected to grow nine percent year-on-year, reaching 229.4 million units. Bangladesh’s projected growth of 28 percent year-on-year, added to India’s rise of nine percent year-on-year, provides a major contribution to this forecast figure.

Smartphone sales 2016 vs. 2015

Units sold (in million)

Sales value (in billion USD)

2015 sales

2016 sales

Y/Y change

2015 sales

2016 sales

Y/Y change

Western Europe

135.4

131.6

-3%

52.9

53.6

1%

Central and Eastern Europe

71.5

78.5

10%

14.5

17.1

18%

North America

191.0

191.3

0%

72.1

71.8

0%

Latin America

108.4

107.1

-1%

26.8

31.7

18%

Middle East & Africa

157.5

165.5

5%

40.4

41.8

3%

China

385.3

450.1

17%

116.2

133.6

15%

Developed Asia

73.4

73.8

1%

43.0

45.3

5%

Emerging Asia

197.9

210.2

6%

32.2

34.1

6%

GLOBAL

1,320.5

1,408.0

6.6%

398.1

428.9

7.7%

Source: GfK Point of Sales (POS) measurement in 90+ markets for calendar years 2015 and 2016

Arndt Polifke, Global Director of telecom research at GfK, comments, “There is no other technology product that is as intensively used by consumers as the smartphone. As a result, smartphone demand remains stable even in saturated markets. Spurred on by the impressive range of exciting innovations, such as virtual reality, artificial intelligence, smart home functionality, mobile payments and mobile health, smartphones are going to gain further relevance for consumers in developed markets. On top of this, developing regions such as the Middle East/Africa and Emerging Asia have yet to mature and as such still have significant potential for growth. These two factors lead to a solid growth outlook for smartphone demand in 2017.”

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