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Kiwis are spending less money on smartphones

  • Technology
  • June 28, 2018
  • Sarah Dunn
Kiwis are spending less money on smartphones

On the occasion of the new Huawei Nova 3e’s launch, Spark has released some data about the smartphone market as a whole. It turns out that last year, the smartphone market experienced its first year-on-year decline in nearly 10 years.

According to research by IDC, the New Zealand smartphone market value saw its first full year on year decline since 2008 last year. Around 1.6 million smartphones were shipped in 2017, representing a drop of 14.5 percent on more than 1.8 million shipped in 2016.

Chayse Gorton, market analyst for IDC New Zealand, says there are at least three factors contributing to this decline: “A saturated market, a change in vendor strategy, and new features failing to drive faster consumer upgrade cycles."

IDC estimates 79 percent of consumers owned a smartphone in 2017, saying most Kiwi shoppers hold onto their smartphones for around three years.

"New Zealand consumers do not refresh simply because a new feature has been introduced to a smartphone, instead they must feel that there is a significant benefit to be attained through upgrading,” says Gorton.

On top of this, IDC believes many smartphone vendors seem to be increasing the average selling prices of their devices. It reports that the average selling prices of smartphones for both market leaders, Samsung and Apple, increased 14 percent year on year.

Spark’s general manager of customer and marketing, Richard Sandford, agrees the premium smartphone market – devices in the $1,000 plus price band – is taking a much greater share than one year ago. An increase in price is also visible in the rising average selling price. From 2017 Q1, Sandford says, the average selling price from smartphones coming into New Zealand was $617, rising to $802 in 2018 Q1.

Sandford adds that the sub-$200 entry level market is decreasing, with those buyers moving to mid-range and premium smartphones, where quality is improving.

Over the last four months, the market for mid-range smartphones like the new Huawei Nova 3e has doubled in size, Sandford says.

“This is because the difference between a high to premium smartphone versus a mid-range smartphone is becoming progressively slimmer. Customers no longer need to spend thousands to get exceptional experience, with high-grade specifications and functionality.”

“It’s well known that the smartphone market is moving at an unprecedented rate, pushing the boundaries of innovation and design. However, year-on-year the cost of flagship smartphones is also on the rise and often out of reach for many. The Huawei Nova 3e levels the playing field and delivers advanced features to everyday Kiwis that were previously only available in the premium market.”

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