A study by Counterpoint Research indicates that the average selling price of a smartphone increased by 10% in the second quarter of 2020 despite the COVID-19 crisis. This would be due to a larger drop in demand for affordable devices, while the premium segment was more resilient (partly due to 5G).
Despite the crisis and a drop in demand, the average price of a smartphone increased in the second quarter, according to a study by the company Counterpoint. While demand for affordable devices has declined, the premium model market has been more resilient.
For this study, Counterpoint uses data, the wholesale average selling price (ASP), or average wholesale selling price. According to the company’s study, this average selling price increased by 10% in the second quarter of 2020, compared to the average selling price during the same period in 2020.
It has increased on all continents except Latin America. And this would have been only 1% in Europe. This increase in the average price of smartphones despite the crisis would be explained by several factors.
Premium segment weathers crisis better
“While the COVID-19 pandemic had its effect on the overall smartphone market, the high-end segment was very resilient, with a small decrease of 8% year-on-year in the quarter compared to the biggest decline in the global smartphone market,” read Counterpoint note.
“The economic impact of the pandemic on the basis of potential users in the premium segment was less than other customer segments,” the company added. On the other hand, Apple, which is the largest player in the premium segment, was ultimately not too affected by the pandemic in the second quarter.
The increase in shipments of 5G smartphones would also have contributed to this increase in the average selling price of smartphones worldwide. Counterpoint estimates that 5G devices have a 10% share of global shipments, but a 20% share of industry revenues.
In the second quarter, most 5G models were still premium devices, whereas today we have more 5G models but affordable, like the OnePlus North. Meanwhile, 5G smartphone sales were boosted by China, where the economy had already rebounded in the second quarter.
On the other hand, the mid-range and entry-level smartphone market has been hit hardest by the crisis and containment. These devices would be purchased more often in stores, but not online. And those who are interested in these devices would have avoided making non-essential expenses because of the economic situation.