Europe falters but smartphone sales on the rise

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The European smartphone market may just be hitting saturation point. According to sales data analyzed by GfK, sales in the last quarter of 2017 showed a 3% decline since the same period in 2016. 

Europe wasn’t alone: there was also a decline in smartphone sales in China and in the emerging and mature Asian markets. However, sales were buoyant elsewhere in the world, particularly in Middle East and Africa. Sales in the regions showed a year-on-year increase of 8%, while sales in central and eastern Europe showed an rise in sales of 7%. While both north and south America contributed to the positive outlook.

The decline in sales is not being matched by declining revenues, however. While European vendors have to negotiate that decline in sales, its sales revenue is healthily growing at a rate of 17% year on year. Small beer, compared to the large rise that central and eastern Europe experience – a rise of 28% is very healthy indeed.

It’s not surprising that revenues are slowing somewhat, however, smartphone prices have increased by 10% year, softening the blow for those European dealers who are faced with declining sales.

According to GfK, much of the rise in revenues was down to the 24% rise in value growth in Great Britain and the 19% value growth in France.  The company predicted, however, that the outlook for the region in 2018 is positive, with demand expected to rise by one percent to total 126.4 million units.

Struggling

Asian markets are struggling more, despite the rise in unit price, developed markets on the continent suffered particular losses. Further west, the strong markets in Egypt and Saudi Arabia fuelled growth in the region.

Yotaro Noguchi, product lead in GfK’s trends and forecasting division, said, “The outlook for 2018 is positive as GfK forecasts global smartphone demand to rise by three percent compared to 2017, driven by emerging Asia and central and eastern Europe. With saturation in developed markets, consumer retention will be a key focus for smartphone makers, which, alongside increased commoditization, will encourage greater innovation and differentiation in order to spur sales.”