Smartphone affordability worsens as price rises by 10%
TECHDIGEST – The affordability of smartphones for regions with low smartphone penetration worsened as the average selling price of smartphones increased by 10 per cent in the third quarter of 2022.
New research by Counterpoint’s Market Monitor Service revealed that the increase was partly due to the record shipment contribution of 5G handsets, which cost five times an average non-5G phone.
Also, it stated that the global smartphone handset market’s revenue declined 3 per cent year-on-year in Q3 2022.
The report said, “The global smartphone handset market’s revenue declined three per cent YoY in Q3 2022 to just above $100 billion, according to the latest research from Counterpoint’s Market Monitor Service.
“A 10 per cent YoY growth was seen in the average selling price thanks to the premium handset segment’s greater resilience to economic uncertainty. The record shipment contribution (46 per cent) of 5G handsets, which cost five times an average non-5G handset, also added to the ASP and revenue growth. In terms of shipments, the overall handset market saw a 12 per cent YoY decline during the quarter.”
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Commenting on the price of 5G effect on ASP growth, Senior Analyst Harmeet Singh Walia said, “At over $80bn, the revenue contribution of 5G handsets reached an all-time high of 80 per cent of global handset revenues, up from 69 per cent in the third quarter of last year.
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“In the same period, LTE handsets’ revenue contribution fell 10 per cent to $19bn. This shift from 4G to 5G has been led by Apple, which alone makes up for over half of all 5G revenues as over 95 per cent of its phones are 5G-enabled. Apple saw a 10 per cent YoY revenue growth and seven per cent YoY ASP growth in Q3 2022, contributing to an overall increase in global handset ASP.”
The launch of the iPhone 14 series as well as the Pro models, especially from the previous generation drove the increase in Apple’s revenue.
Smartphone affordability is one of the major barriers to Internet and connectivity access. According to Alliance for Affordable Internet, the average cost of a smartphone was about 37.46 per cent of the average monthly income of a Nigerian.
It explained that 2.5 billion people globally still pay more than 30 per cent of their monthly income to purchase the cheapest smartphones available in their markets. It explained that while smartphones have enabled digital participation, they are largely unaffordable globally, especially in low-and-middle-income countries.
It said, “At present, countries are not doing enough to better understand what can be done to improve smartphone affordability.”
According to the organisation, only about 44 per cent of Nigerians own smartphones.
Recently, the Vice President, Global Telecommunications Industry, IBM, Craig Wilson, told The PUNCH in an interview, “A sweeping majority of Nigerians lack access to smartphones with 4G-like speeds for Internet connection and the capacity to use the Internet on a daily basis, according to the Alliance for Affordable Internet.”
He stated that the high cost of 5G devices would impact rollout plans in the country, adding that “The cost of a 5G device currently runs around $350, making them unaffordable for many.”
