Smartphone users are showing keen interest in purchasing new terminals after a year of declining sales. A new analysis released by Gartner reveals that the industry is already experiencing double-digit growth and showing signs of a rapid recovery. In the first quarter of 2021, global smartphone sales reached nearly 378 million units sold, a 26% increase from last year, according to Gartner.
Consumers have remained cautious in their spending for much of 2020, marred by the health crisis and the resulting uncertainty. This resulted in a 12.5% drop in smartphone sales last year. Much of the spending that had been set aside in 2020 has instead been pushed back to 2021.
A trend that is confirmed today, explains Anshul Gupta, senior research director at Gartner. “Consumers started spending on discretionary items when the pandemic situation improved in many parts of the world and markets opened up,” the latter said. “However, it cannot be ignored that the basis of comparison is also lower in 2020 than it was in 2019. This explains the double-digit growth.”
Apple and Samsung in the fight
Apple and Samsung continue to dominate the market, with Samsung overtaking Apple this quarter with a 20.3% share, leaving the Cupertino giant with just over 15% of the market. The two companies have been chasing each other for years and are expected to continue playing cat and mouse in the coming months. At the end of 2020, for example, the momentum was reversed: Apple overtook Samsung in the last quarter to hold more than 20% of the market, while Samsung claimed a 16.2% share.
This was in large part due to Apple’s launch of the iPhone 12 5G, which helped boost the company’s sales to 80 million devices in the closing months of 2020 – a teaser of the growth ahead for the rest of the industry in early 2021. Analysts have long predicted that Apple’s new 5G device will trigger a “supercycle,” further sparking consumer interest in faster speeds and encouraging smartphone owners to upgrade. upgrade their devices.
For the latter, the adoption of 5G smartphones will boost the entire industry: much of Samsung’s recent growth, for example, can be attributed to the Korean giant’s early shipment of 5G smartphones. Gartner analysts predict that 5G-enabled devices will make up 35% of total smartphone sales in 2021.
Is the way clear for Apple?
Apple, in particular, is expected to reap significant financial benefits from this new supercycle. In a separate report, analysts at Juniper Research found that despite the Cupertino giant selling less than 20% of total devices shipped, Apple will report nearly 40% of sales value in the next few years due to the higher price of iPhones. In 2022, analysts estimate, the smartphone market will represent 560 billion dollars, including more than 200 billion for Apple.
The trend is unlikely to reverse, as the cost of Apple devices is only expected to increase in subsequent years as Android devices become cheaper. According to the Juniper report, the average selling price of an iOS device in 2024 will be around $ 700 globally, compared to just over $ 200 for an Android device. IOS users will not hesitate to turn to expensive devices, however.
Indeed, the company has succeeded in convincing a loyal customer base to regularly switch to more expensive devices thanks to an ecosystem of software and hardware that is second to none among other vendors. A case in point: the company’s XR and XS models, priced around $ 750, are among Apple’s most popular smartphones upon release, Juniper analysts noted.
The reconquest will wait for Android
It will therefore take additional work for manufacturers of smartphones running Android to encourage users to buy their high-end phones. Juniper researchers have pointed out several features that could help do the trick, ranging from foldable form factors and camera quality, biometric-based security and, of course, connectivity. 5G.
Even that might not be enough. Competing with the long-established reputation of the Apple brand will likely be a challenge that even the diversification of features cannot solve.
“The most successful smartphone vendors are past the stage where they bring in consumers because of their features. They attract and retain them because of the brand, rather than because of what phones necessarily do,” James Moar, who co-authored Juniper’s report, tells .
For the latter, “iOS has an advantage here because it has its own autonomous ecosystem, while the Android ecosystem is open to many vendors, who generally have a weaker individual brand identity.” And to recommend that small vendors increase their marketing spend to increase brand awareness, something few vendors have done internationally to date.
Apple sales are set to explode in the coming months, it will take a good dose of innovation for small players to find a place in the market. For consumers, however, it could mean better devices that will make the upgrade all the more tempting.