GfK has reported that global smartphone sales grew by over 50% year on year in the first half of 2012, with more than 650 million smartphones sold to June.
In western industrialised states, in particular, more and more customers are choosing smartphones over ordinary feature phones with proprietary operating systems. In many west European countries, significantly more smartphones than feature phones are already being sold, and so for manufacturers, this means that a range of attractive smartphones is an absolute must. On the other hand, if manufacturers position themselves in the dwindling feature phone market where the profit margins are also lower, they will come to a dead end sooner or later. Added to this is the fact that, particularly in the case of the more expensive mobiles, consumers are almost exclusively buying smartphones in every case. This means that smartphones costing in excess of €150 now account for at least 80 percent of global mobile phone sales.
Conversely, in the emerging economies and developing countries, more feature phones are still being sold at present. However, the share attributable to smartphones is growing at a significantly faster rate, since on the one hand, purchasing power in these countries is rising and on the other, there tends to be a burgeoning middle class. For example, in Latin America, during the first six months of this year, one in five mobile phones bought was a smartphone, compared with the prior year, when the figure was still one in seven. In Asia, over the same period, the smartphone share of mobile phones has leapt by 22 percent to its current level of 41 percent. In North, South and East Africa, too, the demand for all-singing, all-dancing electronic devices is also rising sharply and at present, just under one in seven cellphones sold in this region is a smartphone.
Europe: a slight decline
In the first half of 2012, in a year-on-year comparison, the mobile phone market in western as well as eastern Europe dropped back by 3 percent. In response to the sustained economic and financial crisis, consumers appear
to be buying fewer technical appliances, such as mobile phones. In addition, a relatively high number of consumers already own feature phones or smartphones. While the demand for smartphones remains high, it cannot totally offset the decline in feature phones. Special introductory price segments promise further growth for smartphones, if manufacturers and retailers are successful in convincing consumers who have previously been bying feature phones of the advantages of a smartphone, such as mobile internet use on the go and downloadable apps.
For manufacturers, which operating system to opt for has become a major strategic decision. Once consumers have become used to an established system, they are not really willing to change, and so they tend to go for the same system when buying the next cellphone.
Those who already have a smartphone are easier to persuade when it comes to buying a new phone, especially if the technology has been significantly upgraded. Improvements might, for example, consist of a faster processor, a larger display format with higher resolution or it might be a smartphone designed in line with the new LTE mobile telephony standard, making mobile internet access easier and quicker for consumers. LTE technology is currently being introduced right across Europe and in tandem with this, recent months have seen the first LTE smartphones coming onto the European market. With sales totaling 1.9 million units in the first six months of 2012, ten times more of these appliances have already been sold in Asia than in Europe in the first half of 2012.
Germany: a moderate decline
In the first half year of 2012, Germans bought a total of 2.6 percent fewer mobile phones than in the same period the prior year. This decline is still very moderate compared to other countries, such as the UK (-11.4 percent), Spain (-8 percent) or Italy (-6.6 percent). In a European comparison, the consumer mood over the timeframe in question remained robust in Germany, where consumers still continued to make larger purchases.
As in the rest of the European market, there are growth opportunities for smartphones, mainly at the lower priced end of the market. However, this will make further inroads into sales of feature phones, sales of which at prices of €150+ are virtually zero. In addition, mobile surfing has become cheaper in Germany, making it attractive to more consumers. France is registering similar development.
In Germany, sales of LTE smartphones are still in their infancy, with the market for mobile internet broadband sticks using the same technology somewhat more developed. Network operators have announced their intention of intensifying their marketing of LTE smartphones, which should boost sales of premium devices in future and give the whole segment positive momentum.
The method
Through its retail panel, GfK regularly gathers data on mobile phones and landline telephones, mobile broadband dongles, mobile phone accessories, radio devices, phone tariffs and mobile content such as games and ringtones in more than 90 countries around the world. This analysis is based on information on current developments in the mobile market for the first half of 2012.