Smartphones, mobile phones and wearables are still the powerhouses in the $1.2 trillion technical consumer goods (TCG) market, claiming a 44% share. Although global smartphone demand declined 3% in 2018 to 1.44 billion, sales remain strong and reached $522 billion. These GfK findings are being released to coincide with Mobile World Congress 2019 in Barcelona.
Global smartphone sales remained strong in 2018 as the premium trend continued to fuel growth; this equates to an increase of 5% ($522 billion). However, the demand for smartphones in 2018 declined by 3% to 1.44 billion units sold worldwide versus 2017. Smartphones represented the majority of the total spend on the global TCG market last year. This is expected to grow 1% in 2019.
The figures for Q4 2018 reveal a similar trend -- around 375 million smartphones (down 7%) were sold worldwide year-on-year, with a sales value of $144 billion.
While premium continues to fuel growth, dearth of appealing innovation continued
Around 12% (up from 9% in 2017) of smartphones sold were priced at more than $800 in 2018. The mid-segment of $150 to $400 continues to be an important competitive battleground, accounting for 46% of smartphones sold globally in 2018 (up 2% from 44% in 2017).
Although a somewhat tough comparison with a strong Q4 2017, from October to December 2018, the dearth of appealing innovation continued prolonging replacement cycles and putting average selling price (ASP) under pressure. As a result, ASP declined 2% to an average of $384.
GfK’s Consumer Life study shows that consumer trends are changing when it comes to possessions. Not only do consumers “prefer to own fewer but higher quality items” that they will pay premium prices for, but they also “value experiences more than possessions.” Whether it is memory size, larger screen size, or a high-megapixel camera, this innovation does not ignite consumers’ imagination and stimulate demand.
Technological convergence enabling richer experiences
Igor Richter, GfK’s Telecommunication expert says: “Our research shows that although the new features in smartphones have comparable performance features and computing power with laptops, these high-end specs still need to be converted into new experiences. High-end gaming has been reigned by the PC industry and is currently a major growth driver there. However, there is an untapped potential for more demanding gaming on the smartphone. Despite the relatively small smartphone screens compared with PCs, their fast chipsets, sharp displays and increased battery capacity make these gaming smartphones ideal handsets to deliver the processing-power-hungry gaming experience on the go. This explains why 55% of smartphone users worldwide played games on their smartphone in the last 30 days.”
Core wearables remained on a strong growth path in 2018, with year-on-year demand up 16% and sales value up 35%. Demand was driven by the rise of SIM-enabled smartwatches, which represent the majority of sales value within the Core wearables category. SIM-enabled smartwatches accounted for 17% of the Core wearables sales value, up from 8% in 2017.
Demand in Central & Eastern Europe and Emerging Asia* is only partially offsetting the decline in China
The Chinese market consumes the majority of the global smartphone production, as well as being the home of local brands that are becoming increasingly global. Forty percent of the Chinese brands' smartphone production in 2018 was purchased outside of China -- up from 31% in 2016. The recent decline of demand in China in Q4 2018 (minus 19% year-on-year) is by its weight (27% in sales value) having a significant impact on the global figures. The continued demand in Emerging Asia* (plus 13% year-on-year) and Central and Eastern Europe (plus 3% year-on-year) only partially offset the decline in China in Q4 2018.
About GfK´s methods
This release is based on final GfK Point of Sales data for December 2018. GfK forecasts the end-demand consumer purchases rather than manufacturer shipments. Market sizes are built up by point-of-sale (POS) tracking in 75+ markets with updates on a weekly and monthly basis. For the US, GfK employs proprietary market modeling and consumer research rather than POS to produce its market forecasts. Values are based on unsubsidized retail pricing. Technology consumer goods includes Telecom, Major and small domestic appliances, IT and consumer electronics GfK POS panels.
*Countries included in Emerging Asia in this release: Developed Asia: Australia, Hong Kong, Japan, New Zealand, Singapore, South Korea, and Taiwan. Emerging Asia: Bangladesh, India, Indonesia, Cambodia, Malaysia, Myanmar, Philippines, Thailand, and Vietnam.
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