2015 Q2: Expensive Smartphones Dominate

The smartphone market is highly saturated. The big players, Apple and Samsung, enjoy a combined 35.3% of the market share, while the next biggest player (Huawei) comes in with 8.7% (figures courtesy of IDC, Aug. 2015). Without signing a carrier contract, smartphones aren’t cheap devices by any means; the cheapest version of Apple’s newest model, the iPhone 6S, has a retail price of $649. But despite the heavy market saturation and high price tags, smartphone sales have risen by 10% in the second quarter of 2015 since Q2 2014. More surprisingly, consumers are increasingly buying more expensive models.

North American purchases rose 10% to 44.4 million units in Q2, and the number of retail-priced sales rose 19% to a whopping $18.2 billion. For the full year, Germany-based market research company Gfk forecasts a 10% unit growth to 194.5 million units sold, with retail-priced purchases making up $83.5 billion (an increase of 16%).

As the North American smartphone market nears saturation, sales are also polarizing; high-end models ($500+) and low-end models (up to $250) are increasing in sales at the expense of midrange models ($250 – $500). Growth at the high end was responsible for a total smartphone revenue growth of 19%, nearly double its unit sales growth of 10%.

Unsurprisingly, then, high-end smartphones also enjoy the largest unit share, accounting for a whopping 43%. This is up 5% from Q2 in 2012. Interestingly, North America and China are the only regions to realize an increase in the high-end smartphone market share on a year-to-year basis.

Globally, smartphones with screens larger than 5 inches have been the most popular seller; unit sales rose 48% in Q2 2015. China had the largest regional share of large-screen smartphones, accounting for 63% of unit sales. Overall, global smartphone sales rose 5% to 302.1 million units, and the retail-value of these sales were $92.4 billion.

As with all digital devices, consumers are optimizing their digital consumption by screen size as well as affordability constraints. Currently, larger screens are trending (the rise in popularity of phablets and 70 inch TVs), which is not surprising given the amount of time people spend on their smartphones to stay connected to their work and personal lives.

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