IDC New Zealand: Smartphone Shipments, the Beginning of the End?

Reading time ( words)

According to IDC’s recently published fourth-quarter mobile phone shipment results, tracked from October to December 2017, the New Zealand smartphone market has observed a full year on year shipment decline. This is this first time the New Zealand smartphone market has experienced a full year on year decline since IDC began tracking smartphone shipments in 2008.

1,602,000 smartphones were shipped in 2017, down 14.5% on the 1,874,000 shipped in 2016.

Chayse Gorton, market analyst for IDC New Zealand, suggests "there are at least three factors contributing to this decline: a saturated market, a change in vendor strategy, and new features failing to drive faster consumer upgrade cycles."

The smartphone market is saturated. IDC estimates 79% of consumers owned a smartphone in 2017, leaving a small number of consumers left to make the transition from feature phones to smartphones.

Many smartphone vendors appear to be increasing their focus on profitability, rather than chasing shipment volumes, through increasing the average selling prices of their devices. For example, the average selling price of smartphones for both Samsung and Apple, the two market leaders increased 14% YoY. Huawei, who may have been previously considered as a mid-range vendor introduced the Mate 10 Porsche edition in 2017, priced at over $2000 NZD.

IDC estimates that the average time a consumer holds on to their smartphone remains around 3 years, despite new features continuing to be introduced in the latest devices. Gorton believes, "New Zealand consumers do not refresh simply because a new feature has been introduced to a smartphone, instead they must feel that there is a significant benefit to be attained through upgrading." For example, many vendors have introduced some form of artificial intelligence, dual cameras, and reduced bezels, etc. into their devices, however, the benefits of such features do not yet appear to be adequately portrayed to consumers, and until they are, these features will drive limited upgrades.

Although IDC forecasts smartphone shipments to decline in 2018, revenue is set to increase. This will be primarily driven by an increased average selling price per device.

It is unlikely that this is the beginning of the end of smartphones, but considering the market’s many challenges, it is clear that vendors are already altering their strategies to continue to grow revenue in a saturated market.

About IDC

IDC is the most trusted IT research advisory firm in the market. IDC's IT Executive Programs support businesses globally in the Digital Transformation (DX) of their organizations. Our IT advisory services advise on digital transformation (DX) technologies and strategies that mitigate risk and drive positive business outcomes across IT and the line of business. For over 50 years, IDC has provided strategic insights to enable clients to achieve their key business objectives. To learn more about IDC, please click here.


Suggested Items

Bangladesh Smartphone Market Continues Double-Digit Growth in 2017

03/13/2018 | IDC
One out of the three smartphones shipped in Bangladesh was a 4G-enabled smartphone in 2017. Global and China-based vendors have already upgraded most of their devices to 4G.

Strengthening Our Space Technology Future: Snapshots of Success

01/11/2016 | NASA
NASA’s Space Technology Mission Directorate (STMD) checked off a number of key accomplishments in 2015. These advancements pushed the technological envelope, not only for use near Earth, but also to support future deep-space exploration missions.

Mr. Laminate Tells All: Who Would Like a Mil-Spec Audit?

01/05/2016 | Doug Sober, Essex Technologies Group
I remember when IPC-4101 was completed and released in December 1997 and the question came up “should IPC create a policeman program to enforce it?” To a person that helped create IPC-4101, absolutely no one wanted such an audit program ever again. Including me and the IPC staff liaisons. Maybe we should have rethought that position.

Copyright © 2018 I-Connect007. All rights reserved.