Consumers unwilling to spend big on smartphones, IDC’s Q1 2018 data shows

Samsung Galaxy S8 and S8+

Going to the end of last year, the heavy hitters of the smartphone market, Samsung and Apple, both offered premium devices that attracted ultra-high pricing. The iPhone X, one of Apple’s latest devices in the market, for instance, started selling in Kenya last December for the godawful price of Kshs 130,000. Say that with me, Kshs 130,000. For the base model. Samsung’s then latest and greatest, the Galaxy Note 8, had gone on sale for a whopping Kshs 105,000 2 months earlier.

Notice a trend?

That trend, which, to be honest, I have never endorsed, continued into the new year. 2018 has marked the introduction into the market of Samsung’s highly-acclaimed Galaxy S9 and S9+ smartphones. The two devices have more or less kept with the high price ranges of the iPhone 8 and 8 Plus, iPhone X and Galaxy Note 8 before them.

Sure, these devices, like the Galaxy S9 and the soon to be launched (in the Kenyan market) Huawei P20 Pro, offer the best there is as far as mobile technology goes and miniaturization of any piece of technology does not come cheap but come on, we all get to a point of no return. More so when there are so many awesome budget options. Either way, super premium devices like those in Huawei’s Porsche Design series and the few already highlighted above, end up being devices that users either shun or don’t buy repeatedly. You know, back-to-back kind of purchases. Like, say you had the Galaxy Note 8 and you’re now salivating at the Galaxy S9+. It is likely that you will make the switch to Samsung’s newer but equally pricey gadget, right?

According to data from the International Data Corporation (IDC), that is not really the case. Smartphone buyers shunned the ultra-high-end smartphone in favour of more budget offerings. In the case of Samsung, while early reports indicated that its latest premium smartphones performed well within the first month, they could’ve done better had most people not opted for either the more pocket-friendly Galaxy A (that shouldn’t apply to this one, though) and Galaxy J smartphones or elected to keep their already pricey and capable 2017 smartphones, like the Galaxy S8/S8+ and Note 8.

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There was a consensus among reviewers that despite the Galaxy S9+’s camera mavericks, owners of last year’s model needed not dig into their wallet for the latest shiny piece of mobile tech from Korea. Turns out, they were not just speaking from their privileged high perches. The people felt the same way too. And they spoke with their wallets.

As such, Samsung’s smartphone market share globally dipped by 2.4 percentage points to stand at 23.3% or 78 million smartphone units shipped in the first quarter of 2018 when compared to a similar period last year when 80 million units were shipped.

As backed up by yesterday’s release of Apple’s financial results from the last quarter and Tim Cook’s assertion that the iPhone X is loved despite its high price tag because it offers value (something we heard from GfK as well at the just-concluded IFA GPC), the iPhone generally did well in the last quarter and gave Android device makers a run for their money as well as keep that long-running Samsung-Apple duopoly at the top of the smartphone charts going. See below:

Another takeaway from the IDC’s quarterly data is that as much as a lax in smartphone demand from the world’s largest smartphone market, China, led to the slight contraction of shipment numbers in Q1, Chinese device makers still led the way. Huawei, Android’s second largest device maker, for instance, saw its market share climb to 11.7% from 10% same time last year.

Even though Huawei’s high-end smartphones haven’t been the dearest on the market hence the increase in their popularity in China, buyers still preferred its cheaper mid-range devices like the lite versions of popular high-end models in markets where it is increasingly becoming a popular alternative to pricey offerings from Apple and Samsung like Western Europe.

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Other Chinese companies in the top 5 smartphone vendor list had mixed fortunes. OPPO, for instance, saw its market share decline while Xiaomi seems to be bouncing back well after engaging in reverse gear 2 years ago.

Xiaomi’s entry-level Redmi 5A smartphone, which started selling in Kenya in March during the Jumia Mobile Week and remains on sale through the online retailer and several offline stores like Anisuma, is singled out as having made quite an impact in another price-conscious market: India.

Overall, 334.3 million smartphones were shipped in Q1, a drop of 2.9% when compared to Q1 2017 when 344.4 million smartphones were shipped.

It looks like everyone might want to heed to the advise of IDC research manager Anthony Scarsella who is quoted in the press release from the research firm saying, “The abundance of ultra-high-end flagships with big price tags released over the past 12-18 months has most likely halted the upgrade cycle in the near term. It now looks as if consumers are not willing to shell out this kind of money for a new device that brings minimal upgrades over their current device. Looking forward, more affordable premium devices might be the solution the market needs in the second half of the year to drive shipments back in a positive direction.”

Source :

IDC

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