An important trend in the flourishing Smart phone market in New Zealand is that it has recorded remarkable growth in the 4 quarter of 2020 and the trend is expected to continue throughout the year 2021.
According to the latest IDC Asia/Pacific Quarterly Mobile Phone Tracker, New Zealand Smartphone shipments augmented 23% Quarter on Quarter to over 473,000 units, recording an impressive annual growth of 3% Year on year in 2020 4 the quarter.
5G led growth
The substantial growth in the Smart Phone market could be attributed to the brand new 5 G enabled Apple iPhone 12, which was introduced to the NZ market in the 4 Quarter.
Kiwis were rush to buy the new device, with extra dispensable income saved by not spending on overseas travel. In addition, promotions such as retailers’ Black Friday sales and holiday deals also offered consumers with attractive and competitive prices and linked together most other phone segments. This led to increase in demand as 2020 ended.
“A stable macro environment has instilled greater confidence in consumer spending this quarter,” said Maxim Wilson, Associate Market Analyst for NZ Mobile Devices.
A low interest rate setting keeps on motivating spending in the smartphone market, after a tough first half of 2020, in which spending was focused towards WFH devices.
“Supply was more reliable in Q4 for vendors and telco channels, with the best positioned vendors those who had fulfilled orders far earlier in preparation for the busier periods in November and December.”
However, both Apple and Samsung have not prioritised shipments into the Pacific region, while larger Asian countries tend to get the majority of their premium models.
This, obviously, has resulted in some NZ channels struggling to get enough stocks to meet the demands of the most sought-after models. Some backlogs at ports, particularly in Auckland, have also delayed shipments of certain models to reach telco and retail channels. As of now, it is unclear how long that this current delay in delivery may last for.
Apple leads
Apple became the dominant brand, being the top in sales, in 2020 4Q, claiming for over 200,000 shipments, or 43% of shipments. This was due to the successful launch of its iPhone 12, which was readily embraced by the consumers. The first of Apple’s 5G capable devices will begin a new era for the vendor, as Kiwis begin to grab the next generation of models.
According to IDC, 35% of total NZ smartphone devices were 5G capable in 2020 Q4, an increase from only 8% in Q3 of 2020. This trend is expected to continue as more vendors display these devices not only in premium price packages, but also in affordable packages.
Samsung clamed 168,000 shipments, or just over one third of the market. Once again, there was a strong showing across most of their A Series price range, particularly their low to mid-price range. Significantly, OPPO keeps on to record growth in the NZ market, accounting for 45,000 units and consolidating the brand as the main contender brand to remain for 2021.
While Vodafone retains as a dynamic player in the lower, sub-NZ$200 price band, while Huawei has had a tougher time recently, as it struggles to retain its market share because of the US sanctions. This has effectively prevented it from coming out with new models with Google services.
Price bands across shipments was the dominant trend this quarter. For the first time this year, the ultra-premium brand achieved the top position owing to the iPhone 12 range. The NZ$1500+ segment responsible for 19% of the total market, while the mid-range dropped out of top market segment for the first time in over two quarters, despite capturing 18% of total shipments, and a Year on year gain of 12%.
Positive forecast
According to IDC, the forecast is 281,000 shipments with an expected annual growth rate of 15%.
Major trends for 2021
One of the major trends, obviously, is the shift to 5G: 5G is a major focal point in 2021 for consumers, vendors and telcos. IDC forecast that 50-55% of total NZ smartphone shipments for the year will be 5G capable-devices, as vendors start to offer models in more accessible price ranges, mobbing away from the current premium price range.
According IDC, the mid-range NZ$300-$600 bracket would become the favoured choice for 2021, based on diverse criteria such as the affordability of models with specs not too different to the premium brackets. A 76% YoY growth in the NZ$600-900 price range is expected in 2020Q4. This also indicates Kiwis’ substitution moving away from premium models, a trend that is to continue in 2021.
The focus in terms of supply chain management would be on global supply chains throughout 2021, and the time and cost to freight devices into New Zealand. There have been more signs of stress on the part of chip manufacturers as it become a challenge to meet the vendors’ demands.
A major stumbling block for newcomers (up and coming brands) to market entry was the devastating impact of COVID-19 on the NZ market in 2020. However, this is expected to change in 2021 and there may be more opportunities for brands such as OnePlus, Xiaomi, and Vivo, as they are not only trying to enter the market, but also trying hard to establish a bigger presence in market, specially, through retail channels.
All in all, what is clear is that market volatility for smart phones due to the impact of corona virus would be lessor and even small players may have an easy way to establish their presence in the market. Above all, despite all the constrains, NZ smart phone market would rebound with a healthy growth momentum.
