GfK upgrades global smartphone market value forecast for 2016

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Germany-based research company GfK upgraded its global smartphone market value forecast for 2016 due to growing demand in emerging markets and stronger sales of more expensive devices as opposed to low-end devices costing less than $100 (€88).

The company said it now expects the value of sales to increase 5 per cent this year to $426 billion, up from its previous forecast of $400.7 billion. GfK bases its forecasts on end-user purchases rather than manufacturer shipments. Shipments this year are forecast to increase by 5.1 per cent to 1.39 billion units.

Kevin Walsh, director of trends and forecasting at GfK, said growth is coming from many emerging markets such as China, as well as in Asia and Africa.

“We need to look beyond sales in the major cities and the shipments of global manufacturers to reveal this strong growth -- since it is consumers in rural areas driving this demand. With China being a key part of the trend, it is not surprising that it is local vendors who are benefitting the most,” Walsh said.

Indeed, a separate report from Gartner showed that five of the top-10 smartphone vendors increased sales in the second quarter of 2016, including Chinese vendors Huawei, Oppo, Xiaomi and BBK Communication Equipment as well as South Korea’s Samsung. Apple, meanwhile, saw sales decline by 7.7 per cent and registered its third consecutive quarter of slowing demand.

Both GfK and Gartner said smartphone unit sales increased globally in the second quarter, although they reported varying rates of increase.

GfK said global smartphone sales increased 6.9 per cent year-on-year to 330.1 million units and also noted that the value of these sales grew by 6.2 per cent to $99.7 billion.

Gartner said global sales of smartphones to end users increased by 4.3 per cent to 344 million units.

In Western Europe, GfK said smartphone sales fell slightly in the second quarter by 1 per cent year-on-year to 30 million. The company noted that Spain registered the sharpest decline of 11 per cent because of a hike in tariffs by the country’s three main mobile operators. France, on the other hand, registered 3 per cent growth and German 1 per cent growth. GfK forecasts that smartphone demand in the region will decline to 134 million units in 2016, a drop of 1 per cent year-on-year.

In Central and Eastern Europe, sales increased by 12 per cent year-on-year to 17 million units, with growth finally returning to Russia and Ukraine. Russia recorded an increase of 12 per cent compared to the previous year, ending five quarters of decline. In Ukraine, sales increased by as much as 35 per cent following six consecutive quarters of decline. GfK forecasts that smartphone demand in the region will increase to 77 million units in 2016, up 8 per cent year-on-year.

For more:
- see this GfK release
- see this Gartner release

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