The World in Your Pocket

“Nomadic” products become the centre of the electronics ecosystem

Global smartphone demand peaked alongside a leap in average sales price in 2Q17, demonstrating the essential nature of the smartphone today not only as a “human communication” device, but increasingly as the key element of a “smart ecosystem”. 

Global smartphone demand totalled 347 million units in 2017, according to research organisation GfK, up 4% year-on-year. This makes it the strongest second quarter on record. Emerging Asia led the demand growth with a 13% year-on-year increase, followed by Central and Eastern Europe at 11%, and Latin America at 10%. Market value grew 9% year-on-year, due to rising average sales price (ASP).

Arndt Polifke, global director of telecom research at GfK, comments, “The record demand for smartphones in the second quarter this year shows that, despite saturation in some markets, the desire to own a smartphone is a worldwide phenomenon. How that manifests itself differs widely by region. Manufacturers are maximizing all their creativity to ensure their latest devices are irresistible – and to increase ASP as a result. Elsewhere, m a c r o e c o n o m i c factors and consumer confidence are having an impact, but operators and retai ler s are employing localized tactics to ensure the smartphone remains the connected device of choice.”

Preliminary data from IHS Markit meanwhile shows that leaders of the pack, Samsung, Apple, Huawei, Oppo and vivo all grew, while Xiaomi reversed its recent performance and just missed out on a top-five spot.

+24% – Increase in smartphone sales value in Central and Eastern Europe
Source: GfK 

The market continues to be driven by Chinese OEMs, which have optimised their operations in their home market. OEMs operating on the global stage, such as Apple or Samsung, saw modest growth as established markets for these companies continue to mature.

Samsung shipped 79.4 million smartphones in the quarter, up 3% from the previous year’s result of 77.4 million units. The launch of the Galaxy S8 / S8 Plus helped deliver 11% year-over-year revenue growth to e21.62bn. However, market share of Samsung declined to 23% in the quarter, down from 24% in the year earlier. Samsung has been struggling in China market as the strong top-three OEMs (Huawei, Oppo and vivo) are dominating the market.

LISTEN TO THE MUSIC 

Portable audio – especially in the form of headsets and Bluetooth speakers – remains a sweet spot for many, with innovation continuing to drive the market. It’s estimated by various analysts that the market for headphones will grow at a CAGR of over 7% in terms of revenue and over 5% in volume in the coming years. The headphone market continues to develop rapidly, with changing form factor, use case, and technologies. Overall, the move from wired to wireless headphones has been the dominant trend but this is now moving onto the use of sensors to drive differentiation and new use cases.

4% – The percentage of consumers having purchased a VR product in Germany Source: gfu

TRANSFORMING VIRTUAL REALITY INTO REAL SALES 

Virtual Reality has real potential… but is still very much in its infancy, with German industry organisation gfu reporting only 4% of consumers recently surveyed having purchased a VR product. 15% of those surveyed were, however, interested in purchasing a product, and while 63% said they were not interested, it must be underlined that many cutting-edge technologies only break into a market once the consumer really understands their usefulness. Such was the case just a few years ago with the smartphone, which, before the arrival of the iPhone, didn’t stir the interest of the greater part of the world’s consumers.

€50.62bn Cumulative revenues from global wireless headphone sales 2015- 2020
Source: Research & Markets