Replacement cycles may still be an issue, but consumers are increasingly willing to pay more to get their hands on high-quality devices, a new report from Gartner found.
According to Gartner, end-user spending on mobile phones is on pace to hit nearly $400 billion this year, marking growth of 4.3 percent over 2016.
The firm said growth is driven in part by increased availability of basic phones from up and coming Chinese vendors like Oppo, BBK, and Huawei. That flood of devices helped push the basic-phone average selling price (ASP) up 13.5 percent last year, and the figure is expected to grow by another 4 percent this year, Gartner indicated.
“The increased ASP for mobile phones was driven by users across the board,” Annette Zimmermann, research vice president at Gartner, observed. “They are replacing their basic phones with better-quality and more feature-rich basic phones, due to improved product portfolios from rising vendors such as Huawei and Oppo. In emerging markets, the majority of users are upgrading to better basic phones as the leap to premium phones remains out of reach for most.”
But that doesn’t necessarily mean ASPs for premium devices will be stagnant.
Zimmermann said the introduction of high-end devices like Samsung’s Galaxy S8 and Apple’s 10th-anniversary iPhone later this year is forecast to bump the ASP for premium phones by 4 percent in North America this year.
“Across the world, the device market is becoming less price-sensitive,” Gartner Research Director Ranjit Atwal added. “Consumers and businesses are seeking better products that suit their lifestyles, rather than just opting for the cheapest products.”
Gartner also noted shipments of mobile phones will grow only slightly through 2018, raising from 1.89 billion units in 2016 to 1.91 billion this year and 1.92 billion in 2018. In 2019, though, shipments are expected to get a little boost to 1.95 billion.