U.S. saw 6% overall drop in smartphone sales last quarter, research firm says

Market is saturated with high-end smartphones, and customers are keeping them longer

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Many analysts have been tracking a global slowdown in the rate of smartphone sales growth, partly because many regions have become heavily saturated with high-end models like Apple's iPhone and Samsung's Galaxy S phones.

Now, there is a report of an actual decline of 6% in smartphone sales, as measured in dollars, in the U.S. and all of North America in the fourth quarter of 2015. It is the first decline since early 2012.

That’s according to GfK, a major research firm based in Nuremberg, Germany, which uses actual retail sales and not the manufacturer shipments used by other research firms to tally results.

GfK reported today that smartphone sales reached $23.9 billion in North America for the fourth quarter, down from $25.6 billion for the fourth quarter of 2014. For the U.S. alone, sales were $20.5 billion, down from $21.8 billion for the same periods.

smartphone table Q4 2015 GfK

North American smartphone sales dropped 6.5% in the fourth quarter of 2015, partly because the market is saturated.

GfK also said there was a decline of 1.1% in the number of smartphones units sold in the fourth quarter in North America, dropping to 56.4 million units, compared with 57 million sold a year earlier. For the U.S. alone, 45.6 million units were sold in the fourth quarter, down 1% from a year earlier.

North America was one of two regions globally that saw actual declines in the fourth quarter. The other was Latin America, which saw a 23% reduction in sales dollars and nearly a 13% decline in smartphone units sold, GfK reported. GfK, with about 13,000 market research staffers, tracks consumer purchases in more than 90 global markets.

The U.S. and North America are among the most mature smartphone markets but still one of the most competitive in the world, said Kevin Walsh, director of trends and forecasting for GfK, in an email. With the influence of wireless carriers, buyers are holding on to their smartphones longer than in the past, which reduces purchases, he said.

“More contract-free packages are coming to market, encouraging consumers to hold on to their handsets for longer in exchange for lower monthly” fees, Walsh said.”Value declines were worse than volume declines, as low-end smartphones outperformed the very saturated high-end market.”

Walsh said declines will continue in the U.S. until the fourth quarter of 2016, when major product launches from Apple and others are expected. GfK is forecasting a 9% increase in smartphone sales, by dollar value, in the fourth quarter.

The decline in fourth-quarter smartphones sales in North America smartphone is in contrast to a 12% increase in smartphones sold in China for the same quarter. China’s influence is massive, with double the number of smartphones sold compared to any other region, at 106 million for the quarter, GfK reported.

The analyst firm said that average selling prices globally for smartphones declined by 6% for the fourth quarter and declined by 2% for all of 2015.

For all of 2015, 1.3 billion smartphones were sold, an increase of 7% compared to 2014, GfK reported. However, that growth was offset by the decline in average selling price, which meant that revenues increased by just 5%, reaching $399 billion.

This story, "U.S. saw 6% overall drop in smartphone sales last quarter, research firm says" was originally published by Computerworld.

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