Luxury Portable Consumer Electronics in Taiwan

PROSPECTS

Luxury portable consumer electronics sees ongoing decline

Following the marked decline witnessed in 2017 due to market-leader, Vertu’s liquidation, luxury portable consumer electronics sales continued to fall in the final year of the review period. The category’s contraction results from the waning demand for luxury mobile phones, which are widely perceived as lacking the longevity to justify the high prices they command due to the rapidity of technological innovation in the area.

Competitive challenges

Technological innovation is a key factor driving demand for mobile phones and, in this respect, the activity of non-luxury brands such as Apple and Samsung has lured potential consumers away from luxury products. Another competitive challenge to luxury mobile phones manufacturers comes from companies offering to customise consumers’ smartphones with precious stones and metals, which allow consumers a greater choice of handsets.

Luxury wearable growing fast, but not without threats

Luxury wearables saw dynamic growth in 2018, driven by consumer interest in the novelty of the category, which only established a presence in Taiwan in 2014. Growth is still being supported by the desire of many consumers to be early adopters of wearable technologies.

COMPETITIVE LANDSCAPE

Vertu withdraws from the market

UK-based luxury mobile phones manufacturer, Vertu, dominated the Taiwan luxury portable consumer electronics category until its liquidation forced it out of the market in 2017. Vertu’s demise highlights the considerable challenges facing luxury mobile phones, including the constant innovation of mass brands and the opportunity for consumers to customise non-luxury phones with precious stones and metals.

Luxury brands continue to offer smart devices

While luxury brands face significant challenges in the mobile phones category, illustrated by Vertu’s collapse, innovation continued towards the end of the review period. Lamborghini launched the Alpha-One, an Android smartphone retailing at USD2,450, in 2017.

Obstacles to development

The development of luxury wearables is constrained by the limited availability of such products in Taiwan. Moreover, the category faces a significant dilemma around pricing, as high prices have an important part to play in generating an image of exclusivity, but are likely to deter consumers in luxury portable consumer electronics because of the short lifespan of such products.

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