Global smartphone revenue continued to grow last year despite falling sales. That’s according to the latest GfK data, which showed revenue growing 5% in 2018 to hit $522B.

This is despite smartphone unit sales declining by 3% the same year …

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GfK released the data as new devices are unveiled at Mobile World Congress.

Claiming a 44 percent share smartphones, mobile phones and wearables are still the powerhouse in the $1.2 trillion technical consumer goods (TCG) market. Although global smartphone demand declined three percent in 2018 to 1.44 billion, sales remain strong and reached $522 billion […]

However, the demand for smartphones in 2018 declined by three percent to 1.44 billion units sold worldwide versus 2017.

The explanation lays in the increased average selling price (ASP) of smartphones, as major brands like Apple, Samsung and Huawei continue to push the boundaries of what consumers are willing to pay.

Around twelve percent (up from nine percent in 2017) of smartphones sold were priced at more than $800 in 2018. The mid-segment of $150-400 continues to be an important competitive battleground accounting for 46 percent of smartphones sold globally in 2018 (up two percent from 44 percent in 2017).

However, the holiday quarter – where Apple’s revenue came in well under its original expectations – was an exception.

Although a somewhat tough comparison with a strong Q4 2017, from October to December 2018, the dearth of appealing innovation continued prolonging replacement cycles and putting average selling price (ASP) under pressure. As a result, ASP declined two percent to an average of $384.

GfK says the broader consumer trend has been to ‘own fewer but higher quality items,’ but a challenge for the tech sector is that there is also a preference for spending money on experiences over possessions.

The wearables market, dominated by the Apple Watch, continues to experience strong growth, says the company.

Year-on-year demand [was] up 16 percent and sales value up 35 percent. Demand was driven by the rise of SIM-enabled smartwatches which represent the majority of sales value within the Core wearables category. SIM-enabled smartwatches accounted for 17 percent of the Core wearables sales value.

Again, then, it’s premium-priced products which is driving revenue growth.

Unsurprisingly, China was the main source of bad news.

The recent decline of demand in China in Q4 2018 (minus 19 percent year-on-year) is by its weight (27 percent in sales value) having a significant impact on the global figures.

The strongest growth was in what GfK terms ’emerging Asia’: Bangladesh, India, Indonesia, Cambodia, Malaysia, Myanmar, Philippines, Thailand and Vietnam.

We recently saw four different estimates of iPhone sales during the crucial holiday quarter.

Photo: Shutterstock


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