According to GfK (Growth from Knowledge), a leading analytics company, Global demand has dropped by two percent during the first quarter of 2018. A recent report shows that demand was particularly poor in China, where it dropped by 6% year-on-year, and in North America, where it dropped by 5%.
Yet, despite dwindling demand, the average sales price growth of global Smartphone sales saw an acceleration of 21% year-on-year during the same time. This means that revenue is still growing by around 18% per year. According to the Telecom Expert from GfK, Arndt Polifke, the statistics paint a very different picture of 2018 than most analysts expected. In 2017, Smartphone demand records were being broken, and now the need for phone technology seems to be declining. However, consumers are also choosing high-priced models than they once did, which helps to level out the change.
Key Results from the Study
The results shown by GfK differed from one country to the next, representing the ever-changing trends of the global marketplace. In Western Europe, revenue saw an increase of 23% year-on-year, to a USD value of 14.5 billion. Analysts believe that the increase was driven by a 26% rise in ASP. However, demand dropped by 2% year-on-year, with the UK as the market experiencing the largest fall in demand (11% year-on-year).
Other key results from the study include:
- North America: Demand declined by 5%
- Latin America: Demand grew by 3%, with a revenue growth of 5% year-on-year. There were declines in Brazil (4% drop) and Chile (18% drop) in the first quarter of the year. However, this was offset by a growth of 41% demand in Colombia
- Middle East and Africa: Revenue grew by 7% year-on-year, and demand rose by 2% driven by Egypt’s 42% increase and South Africa’s 14% increase in demand
- China: Demand fell by 6% in the first quarter, though revenue grew by 14% year-on-year with domestic and international brands driving the adoption of premium devices
- Developed Asia: Revenue increased by 13% year-on-year driven by ASP which saw a 16% increase. Demand fell 3% overall. Though Australia saw a significant growth of 22% year-on-year, South Korea experienced a decline of 16%
- Emerging Asia: Demand remained flat during the first quarter of the year. In India, demand fell by 4%, whereas the Philippines and Indonesia saw an increase in demand of 16% and 18% year-on-year consecutively
The Smartphone Market is Clearly Changing
According to Arndt Polifke, the Smartphone market is in a state of flux, with demand seeing drops all around the world. However, because the sales value of Smartphones has increased by around 11% during this first quarter, it’s difficult to see the impact of the demand drops just yet. If more customers continue to purchase premium phones, then this could help to offset the changes in demand.
