iPhone, and expensive phones from Samsung, or Huawei, kept the revenues from the smartphone market at a high level, even if sales decreased during 2018. Although fewer smartphones were sold in 2018, 1.44 billion, the revenues from their sales increased by 5%, to 522 billion dollars, which is surprising, considering the context.
The explanation is very simple, sales have decreased because the phones have become grossly expensive, but the manufacturers make more money anyway from selling a smaller number of phones. The risk was calculated very well, because although sales decrease, receipts increase, because people pay much more than they did before, because they don't really have a choice.
Expensive phones kept receipts high in 2018
12% of the smartphones sold in 2018 cost more than 800 dollars, so somewhere around 160 million units, multiply by 900 dollars, as an average, let's say, and see what you get. Analysts say that people are willing to pay more for premium phones, which will definitely last longer than they did with cheaper phones.
Although global smartphone demand declined three percent in 2018 to 1.44 billion, sales remained strong and reached $522 billion. Around twelve percent (up from nine percent in 2017) of smartphones sold were priced at more than $800 in 2018. The mid-segment of $150-400 continues to be an important competitive battleground accounting for 46 percent of smartphones sold globally in 2018 (up two percent from 44 percent in 2017). Although a somewhat tough comparison with a strong Q4 2017, from October to December 2018, the dearth of appealing innovation continued prolonging replacement cycles and putting average selling price (ASP) under pressure. As a result, ASP declined two percent to an average of $384.
Interestingly, in December the average selling price of smartphones dropped to 384 dollars, so people did not flock to buy expensive phones for Christmas. For 2019, it is expected that the sales of smartphones will continue to decrease, but the most interesting thing to see will be if the receipts will continue to grow as it happened in 2018.
