Smartphones have emerged to become the biggest volume and value sales driver within consumer electronics. However, volume sales have started to slow down as the pool of first time buyers across many of the largest emerging markets has become smaller. Nevertheless, there is still significant latent demand that can be unlocked by driving down replacement cycles and minimising the impact of the second-hand market.
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Despite slowing volume sales growth and declining prices, smartphones will remain the largest driver of both volume and value sales in consumer electronics over the forecast period.
The global mobile communications market is near saturation, with limited potential for significant further subscriber growth. This means that sales of mobile phones to new users will be minimal over 2015-2018.
With the switchover from smartphones to feature phones nearly complete in China by the end of 2014, the number of feature phone users globally has declined dramatically, and will fall further as India and other emerging markets follow suit, with similar implications for the mobile phone market to those observed in China over 2010-2014.
With volume sales almost entirely dependent on replacement purchases, shortening the replacement cycle has become the biggest opportunity to increase volume sales. However, doing so in an increasingly competitive environment will be difficult.
There is a significant difference between the number of mobile subscriptions and the number of phones in use acquired through standard channels. Reducing the proportion of used and black market phones on the market would stimulate demand for new units.
An ever increasing proportion of users globally will be buying their second, third and subsequent smartphones over the forecast period. This, combined with rising usage of mobile internet, will drive a growing number of consumers to switch to higher quality devices.