With over 300 million smartphones shipped in the first quarter of 2019, when we got to see interesting smartphones launched and enter the market, things are not expected to get any better as the year wears on.
According to German research firm GfK, global smartphone sales will continue falling this year, as they have over the last 2 years.
GfK projects that 1.42 billion smartphones will be sold this year, a drop from the 1.44 billion units last year and the 1.49 billion in 2017.
While device makers will be scratching their heads to explore new ways of attracting consumers to smartphones, like we have seen with the recent obsession with foldable devices and, of course, the coming commercialization of 5G across the globe, they will be comforted by the negligible rise in smartphone costs.
According to GfK, the average global smartphone price will rise by just 1% to stand at about Kshs 37,000, a far cry from the Kshs 26,000 that it estimates smartphone buyers in the Middle East and Africa (MEA) region will part with, on average, in exchange for a shiny new device.
The MEA region is expected to account for only 9% of all the smartphones sold around the world this year.
Things won’t be the same in the global television market, but they will be close. Is this why one of the notable TV brands is aggressively diversifying its product portfolio?
Data from GfK presented at the 2019 IFA Global Press Conference in Spain by Jans-Joachim Kamp, the chairman of the gfu supervisory board, shows that TV sales will stagnate this year with the number of TVs sold, 214 million, remaining unchanged from the previous year.
Out of those, Asia is expected to continue leading the pack, accounting for at least 39% of all the TVs sold while the MEA region will account for just 6%, an improvement of at least 1 percentage point, nonetheless.
Even worse – for the TV makers, good for the consumers – the global TV price will drop by 3% to stand at just Kshs 48,000. In the MEA region, the price will dip by 2% to stand at Kshs 43,000.
The key driver for TV sales in 2019 is one specific feature: the resolution.
Demand for ultra high definition TV sets is set to get to an all-time high resulting in half of the TVs sold this year being UHD TV sets, capping a trend that hit the roof in Q4 2018, according to data provided at the IFA Global Press Conference (see image below) by London-based research company IHS Markit.
This brings with it some positive aspects. The high price that is usually associated with UHD TVs – be they powered by Android TV, webOS, Tizen or some other proprietary platform, like Hisense’s VIDAA – will see them account for as much as 70% of the TV revenues generated this year.
The global average for UHD TV sets is expected to be Kshs 68,000, as of current exchange rates. That is in line with what one can get a half-decent 4K panel from brands such as LG, Samsung and Sony in Kenya for even though that is expected to sharply change this year. Bear in mind that the global average is heavily influenced by trends in more affluent markets like Europe which have higher consumer spending power and, as a result, higher averages. Germany, alone, has an average TV price of almost Kshs 100,000, which is unheard of in the entire region.
While the money made from selling TVs continues declining and the number of units sold stagnates, the sizes of the said TVs has been rising steadily over the last 5 years. The average size of TVs globally has moved from 38 inches to 43 inches between 2014 and 2018.
With only 18,600 8K TVs being sold last year, according to IHS Markit, UHDTV-2, as it is also known, is still in its early days and not expected to make a noticeable dent in the numbers this year.
While improved connectivity has meant that more and more users take a look at what’s up in the smart speaker market, that story is better told globally than locally.
On the global front, 75 million smart speakers are expected to be sold this year, according to GfK with the US, Asia-Pacific region and Europe leading the charge with 41 million units, 23 million units and 10 million units respectively. That represents an increase of over 40% from the 53 million units shipped in 2018.
Locally, that is in the MEA region and the Latin America region combined, 2019 will see only about 1 million smart speakers bought. That’s a low number but given what we had to work with the previous year, imagine that is up by 150%!
Given that the global average price for smart speakers peaks at just over Kshs 10,000 per unit, the price of a decent entry-level smartphone, we probably have some of the answers to the question why is that so?