Global Smartphone Sales Remain Strong Thanks To Premium Purchases

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Global smartphone sales remained strong throughout 2018 and in no small part due to the more expensive segment of the market, based on the latest data from GfK.

The market research company says that in 2018 global smartphone sales equated to $522 billion and this highlighted a year-over-year increase in sales compared to 2017.

In early 2018, GfK pointed to $479 billion in global smartphone sales for the year before.

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This is also in spite of GfK echoing the year-over-year decline trend that seems to be in effect with the number of smartphone sold in general. For example, the latest data from the International Data Corporation (IDC) counted 1.4 billion units as having been shipped in 2018 and this was down compared to 2017 – 4-percent by IDC's measuring stick, 3-percent by GfK.

What might seem like a contradiction between the decline in units shipped and the sales generated can be explained by the premium sector of the market and the growth it has seen over the past couple of years.

Again according to GfK, twelve-percent of smartphone sales in 2018 were for smartphones priced at $800 or higher. This represents a nine-percent increase compared to 2017, which further highlights the significant growth the premium sub-sector has seen in just one year.

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This is also likely to be a trend that continues in 2019 and beyond as traces of price increases this year are already becoming evident. Earlier in the week, Samsung announced its latest smartphone options, including the Galaxy S10 series and the Galaxy Fold.

The standard Galaxy S10 comes in at $900 in the US, while the new Galaxy Fold is priced at $1,980.

Although the latter is more of a niche product at the moment, due to its foldable display design, it does highlight that for the newer and emerging smartphones, prices are starting to massively increase beyond what is typically considered to be a premium price for this product.

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Even when removing the Galaxy Fold anomaly from the equation, and even though there's a more affordable "e" model available, the middle Galaxy S10 option is the one many will view as the 'standard' model and the one to go for. An aspect which only goes to serve that prices in the premium sector are increasing in general in 2019 – the standard Galaxy S9 from last year landed with a $719.99 price tag attached.

If this trend continues then it would seem likely the increased prices for these standard models will go a long way to maintaining high smartphone sales in 2019, and again, even if the actual number of units shipped continues to drop.

This will be good news for smartphone manufacturers in general as it continues to feed the understanding that although consumers now prefer buying fewer, they also tend to buy better.

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From the consumer perspective, it's less great news as the data would suggest makers will continue to try and tap in to the higher price points and maybe even irrespective of whether they are offering a product worthy of that price.

In spite of the growth in the premium sector offsetting against the general decline of units sold in 2018, and likely do so again in 2019, it should not take away from the importance of the ever-growing mid-range market. According to the data released today, the mid-range sector (defined as phones priced between $150 and 400) increased 2-percent year-over-year, accounting for 46-percent of the market overall in 2018.