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IDC: NZ's smartphone market sees a 35% boost in Q3 2020

By Nick Forrester
Fri 11 Dec 2020
FYI, this story is more than a year old

New Zealand’s smartphone market looks to be rebounding in line with a broadly improving economic outlook, with IDC reporting the sector’s highest quarterly growth since 2017’s final quarter.

The country’s smartphone market grew 35% quarter-on-quarter in 3Q 2020 to over 384,000 units, according to IDC’s Asia/Pacific Quarterly Mobile Phone Tracker, representing just a -0.1% decrease year-on-year.

The report also found a significant increase in brick-and-mortar retail spending compared to H1 2020, when spending was concentrated on online channels due to COVID-19 restrictions in the country.

Q3 2020’s improved showing is an indication of the normalisation of supply chains and healthier inventory levels, as New Zealand grows accustomed to life largely returning to normal following its elimination strategy towards the pandemic.

“We are starting to see a greater portion of discretionary spend filter into the smartphone market after a disruptive first half of 2020,” says IDC associate market analyst Maxim Wilson. 

“A lack of international tourism has freed up extra income and consumers have increasingly looked at the consumer device markets to allocate their spend. 

“Following on from the strong pent up demand in crucial devices such as PC’s, laptops and tablets, for working and studying from home, we are starting to see demand flow into the smartphone space.”

While brick-and-mortar retail spending has increased this quarter, IDC predicts this may not become a fully-fledged trend. Wilson expects “online channels to account for close to 20% of total shipments in the last quarter of 2020,” — nearly three times the levels a year ago.

IDC’s report also suggests a growing trend towards mid-range smartphones in New Zealand, with the NZD$300-$600 price range accounting for 27% of shipments in Q3 — representing a huge 59% increase year-on-year.

As the quality gap between devices in the mid-range and top-range continues to close, Wilson says he expects this range to continue to perform well next year. 

“Large screen sizes, increased battery life and higher camera megapixels in the mid-range have continued to incentivise more consumers away from premium devices,” says Wilson.

The launch of the iPhone 12 in October may disrupt this, however, with the high-end, 5G-capable offering expected to enjoy a ‘significant uptake’ in the near future.

The price tag of the Apple flagships, ranging from $1349 for the Mini to $2299 for the 256GB Pro Max, will make a significant contribution to total smartphone revenue. The expectation is for YoY growth of 13% fueled by greater demand across the Christmas and sales periods. However, increased demand in larger countries may mean stricter levels of supply for highly sought-after models.

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