SEARCHING FOR THE ‘GOLDILOCKS’ PRICE POINT
Neither the very top nor the very bottom of the New Zealand smartphone market is where it’s at in 2019, according to new research.
Indeed, low-end mobile phones are “likely to phase out” in 2019 as Kiwis look slightly further up the price scale.
According to IDC’s Quarterly Mobile Phone Tracker, lower end phones (sub-$300) declined by 19% last year with punters moving up the value chain and into the mid-range ($300-500), which increased by 43% annually, and the ultra-high-end ($900+) which has increased by 24%.
Kiwi consumers are also be holding on to their devices for longer (3.7 years says IDC) but the positive of this is that they’re still willing to spend more when it is time to renew according to IDC’s figures.
Exhibit A in this respect is that although total shipments showed a slight decline in 2018, IDC also recorded an almost 22% gain in revenue.
How much Kiwis are prepared to spend is the sixty four dollar question – and how much is too much?
Says IDC: “Rising ASPs in the ultra-high-end space is causing concern for vendors given New Zealand market’s price sensitivity.
“Only a few weeks ago [says IDC in March] Spark reported difficulty in moving high-end phones, which begs the question ‘does New Zealand’s smartphone market have a price ceiling?’
“All recent evidence points to yes.
“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.”
IDC even goes so far as suggest that demand in New Zealand for flagship devices could fall if mobile manufacturers continue to raise their prices.
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