Demand for smartphones slumps in first quarter, but revenue still going strong

Worldwide smartphone demand has fallen 2% to 347 million units in Q1 2018, according to a new report from GfK, the German market research institute.
Demand slumped in China, where it was down 6% compared to the previous year. Meanwhile, North American demand sharply followed at a drop of 5% year-on-year.
Overall, average sales prices for smartphones grew to 21% during Q1 2018, which gave revenue a boost of 18% to $129.8 billion – despite the falling demand.
Arndt Polifke, GfK’s telecom expert, explained that saturation was likely driving the changes in demand for smartphones. He said:

“We start the year with a very different picture to the final quarter of 2017, when smartphone demand records were broken. In the first quarter of 2018 by comparison, there was a year-on-year decline in global smartphone demand. It’s perhaps no surprise as we hit saturation point in more markets.”
“On the other hand, consumers are tending to choose higher-priced models as they embrace the latest innovations offered by smartphone brands,” he added. “As a result, the average sales price grew by an astonishing 21% year-on-year to USD 374. This led to 18% revenue growth globally, which is exceptional for a maturing industry.”

In Western Europe, revenue grew 23% year-on-year to $14.5 billion due to a rise in average sales price and growing demand in the ultra-high-end segment.
Similarly, revenue grew in Central and Eastern Europe by 35% to $5.9 billion. Average sales prices rose 29% in the region and demand shot up 5%. This has led GfK to predict continued growth in Russia and the Ukraine markets.
In Latin America, smartphone demand grew by 3% compared to 2017 with 32.8 million units sold. At the same time, Middle East and Africa saw demand rise steadily with revenues growing 7%.

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