The Covid-19 pandemic that is spreading has an impact on the development of the smartphone industry. Counterpoint’s report says the smartphone selling prices have increased.
Based on the results of research conducted by Counterpoint, the average selling price (ASP) of the world smartphone market increased by 10 percent in the second quarter of 2020.
Interestingly, it comes amid a relatively insignificant 23% YoY decline. Especially for the premium segment, it looks tougher with only a decrease of 8% YoY.
“The economic impact of the pandemic on the potential user base of the premium segment is smaller when compared to other customer segments,” said Counterpoint, quoted from the official website, Saturday (26/9).
This situation is evidenced by the demand for Apple, the largest player in the premium segment. While shipments for most OEMs decreased in Q2 2020, shipments for Apple increased 3% YoY and iPhone revenue increased 2% YoY.
Experts believe that among the main factors leading to higher prices will be the switch to 5G as more and more devices with support for fifth-generation networks emerge but at inflated prices.
During the quarter, 5G contributed 10% of the total global handset shipments. The smartphone also accounts for 20% of the total handset revenue as most of the 5G devices in Q2 2020 were in the premium segment.
It said 72% of global 5G handset revenue came from China, where Huawei was the main driver. This is because China is already on the path of recovery while all other major economies are still suffering from the severe impact of COVID-19.
On the other hand, the demand for lower-priced models is badly affected. Entry-level devices are usually purchased offline, and most global markets are in a lockdown stage during Q2 2020. Consumer sentiment is also low, with users in the lower middle class avoiding discretionary purchases.
Thus, overall, the decline in demand for lower price level devices due to the economic impact and the closure of offline retail, the resilience of the premium segment, and increased sales of 5G, especially in China, contributed to the increase in smartphone ASP during the quarter.