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High-End Smartphone Models under Pressure as More Consumers Traded Down in Q2 2020

by Juha Winter | Sep 28, 2020

The second quarter of 2020 was another tough one for the smartphone industry globally, as shipments fell by 17% year-on-year and revenue also by 13% YoY. With the global economy and so many individuals impacted by the COVID-19 pandemic, many consumers postponed their smartphone replacement decisions or, as we’ve shown also in the previous quarter, opted for more affordable alternatives that are “good enough” instead of the super expensive flagship models. This is particularly so in the Android camp, as the world’s best-selling Android smartphone continued to be a mid-range model from Samsung, the Galaxy A51. In fact, no Android flagship device was even in the top-10 list of best-selling smartphone models in Q2’20. In terms of revenue, the A51 was actually the third most revenue-generating Android smartphone in Q2, beaten only by Huawei’s expensive flagships P40 Pro 5G and P40 5G that enjoyed strong demand particularly in their home market of China.

According to recent research published by Strategy Analytics’ Smartphone Model Tracker (SMT) service, looking at the overall picture, Apple’s latest iPhones continued to dominate the charts both in terms of shipments and revenue. Although the iPhone 11 remained at the top, the new iPhone SE (2020) ranked second in shipments and fourth in revenue globally, a strong start for the more affordable iPhone. With the 5G-enabled iPhone 12 lineup expected to be announced soon, Apple looks very well positioned in the very high end, a tier that’s currently quite a difficult place to be for all other vendors.

We’ve previously noted that the US$500-599 price tier offered the best revenue opportunities relative to the number of models in that price tier, just below the ultra high end of US$600+. While relative competition certainly remained low in that price tier also in Q2, it’s actually the US$300-399 price tier that generated the most revenue relative to the number of models in that price tier. Also, as the share of revenue captured by the two highest price tiers diminished in Q2, the lower mid-range and mid-range price tiers grew their share considerably, supporting the notion that more consumers are trading down rather than up.

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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