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US$500-599 Still the Least-Crowded Smartphone Price Tier for Revenue Opportunities in Q1 2020

by Juha Winter | Jul 08, 2020

While the global COVID-19 outbreak was already a reality in the first quarter of 2020, the bigger economic impact was felt in Q2’20. Even so, smartphone shipments fell by 17% year-on-year and 27% quarter-on-quarter in Q1’20, with major vendors such as Samsung suffering nearly a 20% decline in shipments YoY. In revenue terms, the decline was much smaller, just 12%, helped by an increase in ASP driven by Samsung’s strong 5G portfolio. Apple’s shipments declined by just 9% and revenues by 7% YoY, being the least impacted major global vendor. Xiaomi, on the other hand, barely felt any impact at all in terms of shipments or revenue, its geographical footprint being more focused than that of either Samsung or Apple.

In terms of top revenue-generating models, Apple was still firmly at the top, taking 7 out of the top-10 ranks in Q1’20. The iPhone 11 series was naturally at the top, but older models such as the XR and Xs Max continued to capture substantial revenue as well. In fact, even the iPhone 8 was still in the top-10, a remarkable feat for a device that was launched in 2017. Samsung’s S20 series, particularly the 5G variants of S20+ and S20 Ultra, helped maintain Samsung’s position in the top-10 revenue-generating models. The mid-range A51, although much lower priced, was also on the list.

According to recent research published by Strategy Analytics’ Smartphone Model Tracker (SMT) service, as for the ratio of revenue generated to the number of models in any given price tier, the ultra high end of US$600+ (wholesale) is the clear winner, no surprises there.  That’s the domain of Apple’s and Samsung’s latest flagships. But excluding that challenging price tier, it’s the US$500-599, and more recently, the US$400-499 price tiers where the ratio of revenue to models is the most favorable. While the US$400-499 price tier is slightly more crowded in terms of models on the market, the recently increased share of revenue captured by those models makes the price tier attractive, indeed almost as attractive as the US$500-599 price tier. These two price tiers offer the best revenue opportunities for smartphone vendors that are not quite capable of taking on Apple’s or Samsung’s flagship models in direct competition.

Interested in more price-tier analysis of smartphones globally or in any of the 88 countries and 6 regions worldwide covered by SMT? Clients of our service can access the analysis here.

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