Low To Mid-Range Smartphones To Dominate Sales In 2020: Report

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The coronavirus pandemic has hugely impacted the global smartphone market. Meanwhile, the easing stay-at-home restrictions across the world and the new smartphone launches have helped the market to quickly recover. According to the latest IDC report, the economic impact of the COVID-19 has resulted in increased sales of low to mid-range smartphones.

Compared to 2019, the overall smartphone market will see a decline of 7.9-percent in 2020. This is because consumers are now more inclined towards purchasing budget smartphones instead of high-end smartphones. In the second quarter of 2020, the low to mid-range segment (priced between $100 and $400) has captured 60 percent of the global market share.

Mid-range smartphones to dominate 2020 sales

By next year, the market share of these smartphones will reach 63-percent. When combined with smartphones priced under $100, the budget category's market share crosses the 70 percent mark. The change in purchasing patterns is clearly visible in markets across Asia, Latin America, Middle East & Africa (MEA), and Central & Eastern Europe (CEE).

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The sub $400 smartphone sales in these countries dominate with up to 85percent market share in Q2 2020. Notably, there has been a 10-percent growth in sales of the $200 smartphone in the US. In the mid to high-end segment (priced between $400 and $600), the global smartphone market has registered a growth of just 4-percent in Q2 2020.

Ultra-premium smartphones will continue to decline for the next couple of years

Apple's $400 iPhone SE is also competing with the budget Android smartphones this year. The aggressive smartphone launches from Samsung and Chinese brands like Huawei, Xiaomi, OPPO, and Vivo have also helped increase the sales of sub $600 smartphones.

As per the report, it will take at least a couple of years for the ultra-premium segment to get back to its pre-pandemic levels. This segment is typically dominated by Apple and Samsung.

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"Rising unemployment rates and job uncertainty have influenced consumers' buying patterns towards economic and affordable products. Subsequently, the overall portfolio in smartphones is moving toward low-to-mid end devices," said Senior Research Analyst Sangeetika Srivastava with IDC.

In China, mid- to high-end smartphones have registered an 8 percent growth over the same period. Interestingly, China alone has a 21 percent market share in this category. With sub $400 smartphones becoming better with every new generation, it's also reflected in the increasing popularity among consumers.

The average selling price (ASP) of 5G smartphones is expected to come down to $465 by 2024. With 5G becoming more accessible, the budget segment will continue to dominate sales for the foreseeable future.

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