Mobile Phones in Germany

PROSPECTS

High prices and saturation hamper volume growth

In 2018, volume sales of mobile phones continued to decline in Germany, while value sales recorded further growth. The penetration of mobile phones remained high and fairly stable, thus indicating a high level of saturation and limited potential for growth.

Specifically targeted smartphones to take share away from feature phones

Sales of feature phones remained mostly limited to simple pre-paid or disposable phones, as well as purchases for children or elderly consumers who have no need for the added functionality of a smartphone. Nevertheless, the category continued to decline sharply due to the increasing penetration of entry-level smartphones and a shrinking offer of feature phones.

Big, bigger, too big – the development of smartphone screen sizes

Within smartphones, the majority of units sold in 2018 had a screen size of between 4.7-5.

COMPETITIVE LANDSCAPE

Samsung and Apple remain the leading players

Thanks to their longstanding presence and reputation for innovation, Samsung and Apple continued to lead mobile phones in Germany in 2018. Despite continuous criticism of their smartphones for being too expensive, unreliable and to some degree even dangerous due to battery or charger malfunctions, both companies maintained their positions despite slightly losing share.

Changing consumer priorities benefit the rivals of the leading players

With consumers increasingly seeking cheaper but similar alternatives to the smartphones from Samsung and Apple, both companies recorded a decline in volume sales in 2018, mostly to the benefit of manufacturers such as Huawei, ZTE and Haier. Many of their products fare well when compared to those of the leading players, while being offered at significantly lower prices.

Growing challenges could lead to a change in the competitive landscape

Apart from ongoing portfolio reductions and discontinuations within feature phones, with LG being one of the latest players to leave, smartphones is starting to witness increasing concentration. Due to growing competition and increasingly challenging conditions, Microsoft officially discontinued sales of its Lumia line and withdrew support for its Windows Phone 8.

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