10 Dec 2020

New Zealand smartphone market gains momentum as units lift by 35% Quarter on Quarter.

AUCKLAND, NEW ZEALAND, December 10th, 2020 – The NZ smartphone market registered its highest quarterly growth since the last quarter of 2017 as levels of consumer confidence grew amid an improving economic outlook. In the 3rd quarter of 2020, New Zealand’s Smartphone market increased 35% QoQ to over 384,000 units, while down a mere -0.1% YoY, according to the latest IDC Asia/Pacific Quarterly Mobile Phone Tracker.

“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.”

The improving quarter has been helped by a normalisation of supply chains and healthier inventory levels, as the disruption in the prior quarter begins to settle. Despite a 3-week lockdown in Auckland that affected retail channels for a short period in August, Wilson notes the significant increase in retail spending as consumers purchased more devices through brick and mortar, and less through online channels, compared to 1H20.

Despite higher volumes through the retail channel, IDC anticipates online channels to have a far greater presence now due to COVID-19. 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.

COVID-19 has also increased consumers' price sensitivity, as the trend towards the mid-range continues. The NZD$300-$600 price band accounted for 27% of smartphone shipments during Q3, up 59% YoY. Wilson anticipates this range to keep performing in 2021, as the quality gap between devices in the mid-range and top range continues to close. “Large screen sizes, increased battery life and higher camera megapixels in the mid-range have continued to incentivise more consumers away from premium devices.”

This trend will be challenged in Q4 however, due to the Oct/Nov launch of the new 5G flagship iPhone 12. Despite weakening demand for 5G capable devices in the past two quarters, Wilson expects to see a significant uptake of 5G capable smartphones. IDC is forecasting an increase in market share from only 8% last quarter, to 41% in Q4, of which the majority will be the iPhone 12.

The price tag of these 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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International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading tech media, data and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights: http://bit.ly/IDCBlog_Subscribe.

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