Low- to mid-range smartphones dominate worldwide shipments, says IDC
Joseph Tsai, DIGITIMES, Taipei
Economic uncertainties have increased the downward pressure on smartphone prices globally with 73% of shipments in 2020 expected to be priced below US$400, according to IDC.
Worldwide smartphone value is expected to decline 7.9% in 2020 to US$422.4 billion, down from US$458.5 billion in 2019. The downward trend is intensified by consumers turning to devices priced in the low-to-mid range as they prioritize spending on essentials.
Overall, the low-to-mid-end segment (US$100 to less than US$400) dominated global smartphone shipments with 60% market share in the second quarter of 2020 and is expected to grow in the short term to 63% by next year.
The mid-to-high-end segment (US$400 to less than US$600) grew its share of the market by almost 4pp to 11.6% in the second quarter of 2020. Devices from Samsung, Huawei, and other Chinese vendors such as Xiaomi, Oppo, and Vivo are the main vendors driving these segments.
Apple also recently entered the mid segment with its new iPhone SE device, which has performed well, further validating the trend toward more budget-friendly devices.
“Rising unemployment rates and job uncertainty have influenced consumers’ buying patterns towards economic and affordable products. Subsequently, the overall portfolio in smartphones is moving toward low-to-mid end devices,” said Sangeetika Srivastava, senior research analyst with IDC’s Worldwide Mobile Device Trackers. “This has intensified competition as market players need to continue presenting attractive deals and bundling offers to encourage consumers to purchase a new device, especially in the higher-priced segments.”
The pressure on prices is reflected worldwide, though it is most obvious in developing regions such as Asia Pacific (excluding Japan and China), Latin America, Middle East & Africa (MEA), and Central & Eastern Europe (CEE) where under US$400 devices captured up to 85% of the market in the second quarter of 2020, said IDC.
Even in the US, devices under US$200 increased their share by 10pp on year to capture 27% of the market in the second quarter of 2020. In China, the mid-to-high-end segment (US$400-US$600) grew the most with an 8pp increase in market share to 21% in the second quarter of 2020.
“Looking forward, as consumers increasingly want a better value proposition from their phones, the low and mid segments will remain the most popular. However, in the long term, IDC expects the fastest growth will be in the US$400-600 price band as 5G sales grow and the average selling price (ASP) for 5G phones drops to US$465 in 2024,” said Nabila Popal, research director with IDC’s Worldwide Mobile Device Trackers.