Of the 16 markets tracked in H1 2020, 13 registered double-digit declines—only Taiwan managed to turn in trivial growth.
The Asia Pacific region’s (APAC) smartphone sector shrank by 20% between Jan and July this year to reach just over US$119m—nearly US$30 billion less than in the same period of 2019. Overall, the region’s consumers bought around 329 million smartphones—97 million units fewer than 2019.
According to the latest GfK Point of Sales tracking of APAC’s smartphone sector, Taiwan was the only market that managed to turn in marginal growth (1%), while the rest of the 15 markets reported wide-ranging declines in market value, from the single digit levels seen in Indonesia (-4%) and Thailand (-7%) to the higher double digit drops reported in India and Singapore (both -42%).
As the first market affected by the pandemic, China’s smartphone market managed to rebound faster when compared to the rest of the major markets in the region. Its overall sales value in January to July recorded the least impact, at -15%, compared to Korea (-17%), and Japan (-33%) and India (-42%).
According to Alexander Dehmel, Market Insights Lead (APAC), GfK: “The region’s smartphone market was hardest hit in the second quarter when many countries here entered lockdown mode. This was also when we started observing new trends emerging and the corresponding shifts in consumer demand for durable goods. Based on the broad range of categories that GfK tracks, consumers started purchasing more products that support (remote-working) requirements (work, cook, entertainment), moving away from mobility-related gadgets such as smartphones and wearable devices.”
Banking on speed
The onset of the pandemic and its negative impact on the economy did not appear to dampen consumers’ enthusiasm towards 5G smartphone, specifically in China and Korea. GfK’s latest report reflects strong consecutive month-on-month deepening volume penetration of 5G smartphone to reach 51% and 40% in China and Korea respectively, in July. The other market in APAC which registered strong uptake was Hong Kong where over one in every four (29%) smartphones sold in July was 5G enabled.
“Although only six markets in the region have begun rolling out 5G services, already one in five (21%) of total smartphone sales across all of APAC, or nearly 62 million smartphones sold in the first seven months wer 5G enabled—driven predominantly by China and Korea. Aside from the fact that these markets had a head start with the earlier rollout of 5G services, much of the high adoption rate was contributed by the fact that these markets are home to some of the world’s largest smartphone manufacturers, offering consumers there first access to the latest 5G mobile devices,” highlighted Dehmel.
Shifting away from pricey phones
Another key observation is that the pandemic has altered consumer spending on smartphones. Findings on the APAC smartphone market from the first half-year revealed the rising popularity of models from the entry and low to mid-range segments that offer value features at affordable prices. While the dominant price segment in the region’s emerging markets continues to be US$100 – US$200, which accounted for 56% of total market share, an evident shift is seen in the developed markets from the US$800 to US$400 – US$600 price segment.
Said Dehmel: “We are expecting some recovery in the closing quarter into 2021, under the assumption that the COVID-19 situation improves and remains under control in the local markets. The region’s smartphone market should be back on track to growth by second half of 2021, driven largely by the much-anticipated 5G devices that would be progressively launched into the key 5G markets at prices that are more affordable for mass adoption.”