Smartphone Prices Soar

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Smartphone prices rose 10% in the fourth quarter of 2017, compared to the same quarter a year earlier. The rate of increase was a record. Research firm GfK reported:

  • Global smartphone demand grew one percent to 397 million units in 4Q17
  • Average sales price increased by 10 percent year-on-year
  • Smartphone demand in 2017 totaled 1.46 billion units, generating revenue of USD 479 billion

Global smartphone sales reached 397 million units in the fourth quarter of 2017 (4Q17), a one percent increase year-on-year. Demand was primarily driven by Middle East and Africa, which experienced eight percent growth, and Central & Eastern Europe, where demand grew seven percent. Global smartphone average sales price (ASP) increased by 10 percent year-on-year to USD 363, its fastest quarterly growth

What smartphone companies can no longer gain in unit sales, some are making up on margin.

China was the market that posted the largest sales for the full year. That’s no surprise because of the size of its wireless subscriber market. Smartphone unit sales rose 454 million, a growth of only 1%. However, revenue rose by 14% to $152 billion. “Emerging Asia” sales were next at 232 million units, up 8%. Revenue rose 24% to $42 billion. North American sales ranked third, but up only 2% to 198 million units. Revenue rose only 1% to $84 billion.

The uneven growth in unit sales last year is related primarily to a slowing in the huge U.S. and Chinese markets. Growth is more robust in Emerging Asia, Central Europe (85 million units, up 9%) and Latin American (up 9% to 116 million).

Global smartphone sales have moved from a market share battle, which was waged when smartphone units sales were still rising, to a competition over price. That favors companies like Apple Inc. (NASDAQ: AAPL), which has had the most expensively priced smartphones in the world and, by some measures, the best profitability.