Smartphone devices deemed premium, such as Apple’s 2018 iPhone line-up, helped to drive 2018 smartphone revenue. Shipments of global smartphones fell by some 3% in 2018 to 1.44 billion. Despite that fall, sales revenue rose by 5% to $522 billion. This rise was associated with the premium market, and backed by recent research data.
Gfk claim that the contradiction is linked to the “premium trend” in the Smartphone industry. Phones in the $150-$400 range experienced a modest share growth, a rise from 44% to 46%. On the other hand, roughly 12% of phones sold cost more than $800, an increase from 9% in 2017.
This shift can be put down to a movement in consumers’ philosophies, according to Gfk. The firm said: “Not only do they ‘prefer to own fewer but higher quality items’ that they will pay premium prices for, but they ‘value experiences more than possessions’.”
The current smartphone market
Although, despite this, there were suggestions of a “dearth of appealing innovation” in the December quarter that quashed average selling price down to just $384. The latest smartphones may be sporting extra cameras, more memory and a bigger screen but such features aren’t enough to spark demand as they’re failing to make for new experiences.
Gfk did however, claim that there is untapped potential in the smartphone industry in the genre of gaming. Some 55% of smartphone users have played a game in the last 30 days; hence demand is there. Traditionally, mobile gaming has been limited due to memory and interface issues. PC and console games are able to consume several gigabytes of storage, whereas that has previously been unmanageable with mobile. In addition to this, the lack of gamepads, keyboards and mice as default accessories means users are reduced to inconvenient touch screen controls.
Apple has certainly honed the “premium” smartphone market, with the iPhone XR available at a minimum of $749. That said, the tech giant look to have failed to benefit from wider trends, as seen by their December-quarterly iPhone revenue decline. Revenues dropped 15% to $52 billion, however, a large part of this stemmed from problems in China.