GfK Asia

Singapore, September 14, 2020 – Once robust and thriving, the Asia Pacific smartphone sector which had consistently turned in years of consecutive positive growth, has become a casualty of the COVID-19 pandemic. In January to July 2020, the smartphone market value shrunk by 20 percent to reach just over USD 119 billion—nearly USD 30 billion less than the same period in 2019. Overall, the region’s consumers bought around 329 million smartphones—97 million units fewer than 2019.

According to the latest GfK Point of Sales tracking of APAC’s smartphone sector, Taiwan is the only market which managed to still turn in marginal growth (1%), while the rest of the 15 markets reported wide ranging declines in market value, from the single digit levels seen in Indonesia (-4%) and Thailand (-7%) to the higher double digit drops reported in India and Singapore (both -42%).

As the first market affected by the pandemic, China’s smartphone market managed to rebound faster when compared to the rest of the major markets in the region. Its overall sales value in January to July recorded the least impact, at -15 percent, compared to Korea (-17%), and Japan (-33%) and India (-42%).

“The region’s smartphone market was hardest hit in the second quarter when many countries here entered lockdown mode. This was also when we started observing new trends emerging and the corresponding shifts in consumer demand for durable goods,” highlighted Alexander Dehmel, Market Insights Lead APAC at GfK. “Based on the broad range of categories that GfK tracks, consumers started purchasing more products that support @home requirements (work, cook, entertainment), moving away from mobility-related gadgets such as smartphones and wearable devices.”

The onset of the pandemic and its negative impact on the economy did not appear to dampen consumers’ enthusiasm towards 5G smartphones, specifically in China and Korea. GfK’s latest report reflects strong consecutive month-on-month deepening volume penetration of 5G smartphone to reach 51 and 40 percent in China and Korea respectively in July. The other market in Asia Pacific which registered strong uptake is Hong Kong where over one in every four (29%) smartphones sold in July was 5G enabled.

“Although only six markets in the region have begun rolling out 5G services, already one in five (21%) of total smartphone sales across all of Asia Pacific, or nearly 62 million smartphones sold in the first seven months are 5G enabled—driven predominantly by China and Korea,” noted Dehmel. “Aside from the fact that these markets had a head start with the earlier rollout of 5G services, much of the high adoption rate is contributed by the fact that these markets are home to some of the world’s largest smartphone manufacturers, offering consumers there first access to the latest 5G mobile devices,” highlighted Dehmel.

Another key observation is that the pandemic has altered consumer spending on smartphones. Findings on the APAC smartphone market from the first half year revealed the rising popularity of models from the entry and low to mid-range segments that offer value features at affordable prices. While the dominant price segment in the region’s emerging markets continues to be USD 100 – 200, which accounted for 56 percent of total market share, an evident shift is seen in the developed markets from the USD >800 to USD 400-600 price segment.

“We are expecting some recovery in the closing quarter into 2021, under the assumption that the Covid-19 situation improves and remains under control in the local markets,” said Dehmel. “The region’s smartphone market should be back on track to growth by second half of 2021, driven largely by the much anticipated 5G devices that would be progressively launched into the key 5G markets at prices that are more affordable for mass adoption,” he concluded.

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