Smartphone volume growth in focus as average sales prices decline by 33 per cent

Smartphones and tablets continue to sell well but growth is slowing in mature markets such as Australia as developing countries look to get in on the mobile device boom. That’s according to Steve Koenig, director of industry analysis at the Consumer Electronics Association (CEA), the organisation behind the 2014 CES in Las Vegas.

Presenting research from CEA and GfK at a keynote presentation before the show officially started overnight (Australian time), Koenig said the days of countries like the United States holding dominance in terms of technology consumption are coming to an end.

Speaking about how the consumption habits of developing nations were changing the CE landscape, Koenig said “volume growth is really becoming dependent on lower-end devices” which are required to penetrate developing markets.

The move towards products developed for mass markets makes sense when looking at the big locations for growth in coming years. As an example of where the consumer dollar lies, Koenig cited nine cities in the United States with a population over 1 million — by comparison, the number of cities in China with more than 1 million inhabitants climbs over 160 (Australia has five cities with 1 million-plus populations).

“When all these consumers start to buy technology, what is it going to do to that balance of power in the global technology market? It’s going to shift, and this shift is underway,” he said.

More models are being produced, and more products are being sold to developing markets, which Koenig said would account for 70 per cent of smartphone unit sales in 2014. This has already led to a decline in ASPs for smartphones and tablets that is expected to continue. Globally, ASPs in the smartphone category stood at $444 in 2010, in 2014 they are forecast to drop to $297.

Similarly, although the smartphone and tablet categories have seen modest growth over the past year, this growth has had a “negative impact” on other categories including digital cameras and gaming consoles; products that smartphones and tablets go some way to replacing.

With 43 per cent of the global revenue mix for top tier technology devices attributable to smartphones and tablets, the shift towards lower ASPs and an increase in entry-level products is a trend that will majorly shape the consumer electronics industry in the coming year.

Featured Images: Romance Was Born smartphone case.

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