Story image

Kiwis spending large on phones… for now

11 Mar 2019

Kiwis are shunning low-end phones and opting for more expensive devices, according to the latest report from IDC New Zealand.

IDC New Zealand’s Mobile Phone research shows that New Zealanders are buying fewer low-end phones, instead opting for higher-end devices with greater average selling prices. 

In 2018, low-end devices declined by 19% year on year.

In 2017 the low-end segment accounted for 40% of all shipments, in 2018 this decreased to 32% of the market. 

The lost share has moved up the value chain and into higher-end devices. 

The mid-range shipments increased by 43% annually, and the ultra high-end has increased by 24%.

IDC New Zealand client devices associate market analyst Scott Manion says consumers are willing to invest a greater amount in their devices because they are becoming increasingly reliant upon them in their daily lives.

“Increased reliance upon our phones is leading to greater willingness to invest in a higher-end device. These devices bring better performance and are likely to age better. While vendors benefit from greater revenue in the short-term, these higher-end devices lead to longer life cycles” says Manion.

Consumers are holding onto their devices for longer, however, they are willing to spend more when it’s time to renew.

In 2018 shipments were down 1.6% annually but increasing average selling prices (ASPs) led to a 21.6% increase in revenue. 

According to IDC’s Consumerscape 360 study, the average ownership lifecycle is 3.7 years. 

This, in combination with a saturated smartphone market, is likely the main contributor to decreased unit shipments.

Rising ASPs in the ultra high-end space is causing concern for vendors given New Zealand’s record as a price sensitive nation. 

Only a few weeks ago Spark announced they were having difficulty moving inventory of high-end phones, which begs the question does New Zealand’s smartphone market have a price ceiling?

“All recent evidence points to yes,” says Manion.

“The current flagship market doesn’t offer enough marginal benefit to justify the increased price between models for many Kiwis. Consumers are increasingly opting for older models rather than the new flagship. Often these fulfil the use case without breaking the bank.”

While consumers are increasing their willingness to spend on devices, this spend does have a limit. 

If mobile manufacturers continue to raise device prices, New Zealand market demand for flagship devices is likely to fall.

IDC divides smartphones into a series of tiers based on price bands. The smartphone tiers are as follows:

  • Low end ($0 to <$300)
  • Midrange ($300 to <$500)
  • High end ($500 to <$900)
  • Ultra high end ($900+)
Bitglass appoints new cloud, business development leaders
The cloud security company has appointed vice presidents for worldwide channels and worldwide business development.
Ping Identity offerings accelerates cloud MFA and SSO adoption
90% of respondents trust MFA as an effective security control to protect identity data in public clouds, yet only 60% of organisations have formally adopted it.
Cloud innovation driving NZ IT services market, says IDC
Managed services makes up the largest portion of total IT services revenue. However, the project-oriented market achieved the highest YoY growth.
Ingram launches CRM backup on cloud marketplace
AvePoint Cloud Backup for Dynamics 365 is a multi-tenant solution, designed with specific features to enable channel partners and MSPs.
Trend Micro introduces cloud and container workload security offering
Container security capabilities added to Trend Micro Deep Security have elevated protection across the DevOps lifecycle and runtime stack.
Veeam joins the ranks of $1bil-revenue software companies
It’s also marked a milestone of 350,000 customers and outlined how it will begin the next stage of its growth.
Veeam enables secondary storage solutions with technology partner program
Veeam has worked with its strategic technology alliance partners to provide flexible deployment options for customers that have continually led to tighter levels of integration.
Veeam Availability Orchestrator update aims to democratise DR
The ability to automatically test, document and reliably recover entire sites, as well as individual workloads from backups in a completely orchestrated way lowers the total cost of ownership (TCO) of DR.