Smartphone records

January 26th, 2018
The smartphone market continues to set records: In 2017, manufacturers sold of 1.478 billion smartphones with an average price of US$323. In terms of numbers, countries in Emerging Asia and Central and Eastern Europe are driving sales, while customers in North America, Western Europe and Developed Asia are snapping up premium phones – with larger screens, more data storage and processing power, longer battery life, faster charging, and features like better water and shock protection.

However, don’t write off feature phones just yet: in developed markets, feature phones specifically designed for the elderly are hugely popular, while in markets like Russia and India, sales of cheaper smartphones continue to gain importance.

2017 was the year when wearables started to gain traction. Leaders of the pack are Smartwatches, which are beginning to take over from more basic fitness trackers. One category to watch is “earables” – in-ear headphones that also carry sensors and plenty of memory for music, and double up as fitness coaches. Another popular segment is locators with in-built connectivity and GPS, to find children or seniors. That’s especially true for Asia, where every third wearable device sold is a locator. In Europe, demand for wearables is up more than 23% (and 35% in terms of value), with similar growth rates in Asia.

“Smartphones still rule supreme, but 2018 could also be the year of the wearables, as these devices reach the right balance between cost, features and usability,” said Jens Heithecker, Executive Director of IFA Berlin. “The most fascinating aspect of this markets is that so many different industries are offering their take on the category – from mobile phone manufacturers to healthcare specialists to traditional watchmakers and many in-between.”
Dr. Jan Wassmann, Global Analyst New Products at GfK, said: ”In countries like Germany, GfK insights reveal that smartwatches are having a tremendous impact on the sales of traditional wristwatches. For instance, we see that in the Euro300-500 price range, more than every second watch sold so far in 2017 was connected – or smart. It appears smartwatches are a sort of substitution for traditional watches, as the market for the latter is shrinking.”
Have we reached peak tablet?
The rise of the tablet and the decline of PCs were the big tech story of a few years ago, but now we seem to have reached “peak tablet”. During the past year, retail channel sales of media tablets fell by 18% compared to the previous year (January-October). This was particularly driven by a sharp decline in emerging markets, which account for 34% of demand for computers (desktop, laptops and tablet computers).

The fall in the tablet market coincides with a slow recovery for personal computer sales – after years of decline. Notebook channel sales slightly recovered to decrease “only” by 7% compared to the previous year (January-October), but were strongly supported by improved sales for convertible notebooks with touchscreens and ultra-thin devices. Ultra-thin notebooks meanwhile represent 10% of the global retail demand (excluding North America) for computing devices, particularly driven by Western Europe and APAC as key regions.

Make no mistake: tablets are still very popular and for many consumers the go-to device for media consumption and computing on the go, but the rise of the segment seems to have been stopped and even reversed for now.

“Today, computing means mobile computing and, until recently, consumers had to make a choice: devices that were geared either towards media consumption or productivity. Productivity is finally winning out, but new form factors like ultra-thin devices and convertible notebooks are making the choice easier,” said Jens Heithecker, Executive Director of IFA Berlin.

Carolin Weinmann, GfK Global Analyst Computing, said: “With increasing market penetration for media consumption-oriented tablets and subsequent decreased demand for this category, the replacement of productivity-oriented computing devices was re-initiated. Particularly in developed regions, this is currently helping more design-oriented Ultrathin and Convertible Notebooks to grow into the market, ultimately also paving the way for more premium devices. Hybrid Tablets are only partially able to stop the negative trend for tablets worldwide.”

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