Friday, 18 September 2020 07:41

Cheaper smartphones selling better due to economic conditions: IDC

Cheaper smartphones selling better due to economic conditions: IDC Image by OpenClipart-Vectors from Pixabay

The prevailing economic uncertainty will force smartphone prices globally down, with nearly three-quarters of the devices to be sold at prices below US$400 (A$546.9), the technology analyst firm IDC has forecast.

Due to this, the worldwide smartphone value was expected to fall from US$458.5 billion in 2019 to US$422.4 billion this year, a drop of 7.9%, the firm said, adding that the current conditions would see people prioritise spending on essentials.

IDC said phones in the low to mid segments — US$100 to less than US$400 — had dominated shipments thus far in 2020, with 60% market share in the second quarter and was expected to grow to 63% by 2021.

The mid to high segment — US$400 to less than US$600 — increased its share by about four points to 11.6% in the second quarter, with Samsung, Huawei, OPPO, Xiaomi and vivo driving this segment.

"Rising unemployment rates and job uncertainty have influenced consumers' buying patterns towards economic and affordable products," said Sangeetika Srivastava, senior research analyst with Worldwide Mobile Device Trackers.

idc prices

"Subsequently, the overall portfolio in smartphones is moving toward low-to-mid end devices. 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."

IDC said the pressure on prices was a global phenomenon, though it was most pronounced in the Asia-Pacific (excluding China and Japan), South America, the Middle East and Africa and Central and Eastern Europe.

But even in the US, devices priced at less than US$200 increased their share by 10 points to capture 27% of the market in the second quarter.

"Looking forward, as consumers increasingly want a better value proposition from their phones, the low and mid segments (US$100-US$200 and US$200-US$400) will remain the most popular," said Nabila Popal, research director with IDC's Worldwide Mobile Device Trackers.

"However, in the long term, IDC expects the fastest growth will be in the US$400-US$600 price band as 5G sales grow and the average selling price for 5G phones drops to US$465 in 2024."

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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