Dominic Sunnebo: “People hold onto their phones longer"
In this new edition of our Perspectives series we talk to Dominic Sunnebo, Global Strategic Insight Director at Kantar Worldpanel ComTech about smartphone trends.
When asked about the claim by many major brands that people are upgrading their smartphones less frequently than they used to Dominic was able to confirm that this was the case:
“Over the last two years we have found that people are now holding onto their phones on average two months longer than they used to.”
He went on to explain further:
“There are three main reasons for this: firstly, the price of smartphones has peaked in the last couple of years. Of the three major brands, their flagship products have increased in price by about 50% in this timeframe. The second factor is that people consider innovation to have slowed down. The changes that are being made to new models are relatively incremental so it is easier to keep their existing device for longer. The final reason is that consumers are taking back control, buying their phones direct from places like Amazon or the manufacturer and having a sim-only contract. What this means is that there is no natural end or upgrade cycle as there would be with a phone contract”.
Considering the impact of the Chinese brands in this space, Dominic said:
“These brands are getting the product right – five years ago there was a genuine difference in quality between the main brands and the Chinese ones like Huawei. Now the gap has not only narrowed but the Chinese manufacturers are actually leading and producing some very high-quality products. These products are also very affordable, the manufacturing base in China means that they can get huge economies of scale. In addition, some brands like Xiaomi have publicly announced that they will not make a margin of over 5% on their handsets.”
On the topic of smart speakers and whether they might in some ways have stolen the limelight from the mobile market Dominic believes that:
“Smart speakers are very exciting to many, in the US they are now mainstream and it’s not far off this in the UK. It’s important to know that people are as engaged as ever in their smartphones, but the role is stable and they aren’t learning new things with them. With smart speakers on the other hand, people are still learning how to interact with them and understanding what they can do. The fact that they are at a very accessible price point is also important.”
Watch the full interview by clicking on the video above.
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