Smartphone sales see another boost in Q2 2015

Aug 24, 2015

The global smartphone market has seen another boost in the second quarter of the year, led by strong demand from developing markets and the release of new flagship smartphones, according to GfK’s research.

In total, smartphone sales grew by 5 percent in the previous quarter, reaching a total of 302.1 million units. Vendors brought in a combined total of $92.4 billion in revenue, up from $86 billion in the same quarter last year.

The biggest growth in sales numbers comes from emerging Asia Pacific countries and the Middle East, with over 20 percent growth year over year, which has been the trend for a number of months now. North America and Western Europe has also shown signs of a strong pickup this year, with around 10 percent growth. However, China has seen a major slump, with shipments falling by 10 percent compared with Q2 2014, suggesting a contraction after the rush of new low-cost players that have entered the market.

In terms of revenue generation, both China and North America has seen the largest growth rates, up 17 and 19 percent respectively. GfK suggests that this is a result of increased demand for high-end smartphones, where the margins are larger. China’s high-end market is expected to grow along with economic progress and now accounts for 17 percent of the market, up from 10 percent last year. Premium smartphones, such as the new Galaxy S6 Edge, continue to generate revenue in the US.

Mid-range smartphones in the $250 to $500 bracket have apparently seen a large decline in America. The quality of low-cost smartphones, such as the Moto E, have continued to improve and have seen strong demand in the US, leaving little room for some mid-range phones. Essentially, Western consumers seem to prefer either the cutting edge products or those which offer good value for a low cost.

While sales numbers seem up in total, sales value remains more mixed across the global market and GfK’s results do not take costs or profits into account. From other reports and financial result in the year we can still conclude a general downward pressure on pricing in the low and mid-range markets, where competition remains very high. The high-end market continues to remain the most profitable, but is still dominated by Apple and Samsung.

Lower cost brands, such as Huawei, Xiaomi and Lenovo are now looking for new markets to expand to outside of their stagnating and competitive Chinese home. We will have to see how this affects the revenue and grow rates of markets in the coming year. Apple and Samsung remain the dominant brands in the high-end space, which, combined with the prevalence of lower-cost alternatives, appears to be particularly hurting high-end sales for less ubiquitous brands such as HTC, LG and Sony.

The remainder of 2015 is expected to show continued growth, with smartphone shipments expected to reach a staggering 1.3 billion units by the end of the year.

Source: Android Authority