The smartphone market grew by 13.4 percent in value in 2021 to a total of USD 365.5 billion, recovering from the drop in 2020, according to figures released by GfK ahead of the Mobile World Congress 2022 in Barcelona. The market researcher said growth slowed significantly in the second half of 2021 due to the chip shortages in the industry, and this may weigh on the market again in 2022.
In the first and second quarters of 2021, the market recorded revenue growth of 28.7 percent compared to the same period of the previous year. However, there was only a slight revenue increase of 1.8 percent in the second half of the year, GfK said. Sales figures in the second half of the year fell compared to the first half, by 10.6 percent, the market researcher estimates.
For 2022, the company expects the market to grow again, in the mid single-digit range. The exact growth rate will depend on demand for premium products, to offset pressure on volumes from the supply chain problems.
Rising average price, led by 5G devices
Consumers looking to buy new smartphones are in general choosing better and more powerful models, which caused the average price to rise to USD 368 from USD 318 in 2020. This helped offset the drop in sales volume. GfK sees this trend continuing, with the ASP already reaching USD 392 in Q4 2021.
The higher price is driven in part by more 5G devices coming on the market. These are much more expensive, at an average USD 706 for a 5G smartphone, compared to USD 180 for other phones. This helped 5G phones take a 73 percent revenue share.
5G not essential feature yet
Nevertheless, not all consumers see the importance of 5G yet. A survey by GfK in Q3 2021 found that only 25 percent of consumers found 5G an essential feature when purchasing a smartphone. The size of the internal memory (51%), the battery capacity (47%) and the general performance characteristics of the smartphone, such as RAM memory (46%) and processor (38%), were deemed more important.
GfK also put an estimate of the wearables market, at USD 13.8 billion in 2021, up 36 percent. The growth was mainly driven by greater interest in health-related devices.
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