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According to GfK Market Intelligence for Retail, in the first quarter of 2023, the overall smartphone market in Asia experienced a decline of -8% in units and -10% in sales value compared to the previous year. However, amidst this decline, certain premium features are gaining traction, reflecting a shift in consumer preferences, and paving the way for disruptive innovations.
Changing Consumer Preferences
Notably, there is a growing preference among consumers for premium products, resulting in increased demand for smartphones with advanced features. For instance, smartphones equipped with fast processors exceeding 3000 megahertz and camera lenses with 48 megapixels or more have witnessed a significant surge in popularity. These features have experienced remarkable growth of +47% and +25% in unit sales respectively compared to the same period last year. Additionally, the ‘foldable’ segment, a relatively new niche, has been steadily gaining popularity since 2019. In the first quarter of 2023, the foldable segment witnessed a growth of +26% in unit sales and +12% in value sales.
Rise of Advanced Features
One of the key factors driving the growth of premium features is the emergence of new use cases. With the rising popularity of mobile gaming and virtual reality applications, consumers are seeking devices that can deliver a seamless and immersive experience. Smartphones equipped with fast processors can meet the demands of these applications, ensuring smooth and responsive gameplay.
Similarly, smartphones with high-resolution cameras are increasingly favored by photography enthusiasts, enabling them to capture high-quality images and videos using their mobile devices. Moreover, the foldable segment offers a hands-free usage experience as these phones can stand up on their own, facilitating activities such as movie-watching or photography without the need for a stand. The larger screen size of foldable devices also enhances the viability of multitasking and gaming.
Product Innovation is the key to future growth:
The growth of premium features can be attributed to the intensifying competition among smartphone manufacturers. As the market becomes more saturated, companies are striving to differentiate themselves and attract consumers. Offering devices with premium features enables companies to target specific niches and cater to the demands of discerning consumers.
Despite the overall decline in the Asian smartphone market, there are promising areas that present potential growth opportunities. Adopting a product-first approach is crucial for capturing customers' interest. The industry has witnessed emerging trends such as performance, simplification, premium features, and durability, which have influenced its growth. Consumers are increasingly seeking devices that align with their fast-paced lifestyles and provide a simplified user experience.
The Future Outlook:
In conclusion, companies that prioritize the development of devices with premium features are likely to gain market share and maintain a competitive edge. As the market continues to evolve, it is imperative for companies to remain responsive to changing consumer demands and adapt their strategies accordingly.
Consequently, we can anticipate continued investment in research and development by smartphone manufacturers, resulting in the introduction of even more advanced and innovative features in the future.
*APAC: Australia, New Zealand, Japan, South Korea, India, China, Hong Kong, Taiwan & SEA (Singapore, Thailand, Malaysia, Indonesia, Vietnam, Philippines, Cambodia, Myanmar)
The article is written by Mukund Tripathi, Head of Market Intelligence – APAC, GfK
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