Global Handset Sales To Rise 4.9% in 2016, Refurbished Market Poised For Growth

ABI Research has forecast that global handset sales, including both smartphones and mobile phones, will rise 4.9 per cent this year, with the refurbished market poised to grow.

The growth of the refurbished market will push OEMs to reconsider their branding options and portfolios as a whole, ABI states.

“We anticipate the refurbished market to grow significantly over the next five years, particularly as it starts to encompass devices with advanced feature sets and 4G connectivity,” ABI research director David McQueen commented.

“The spike in the refurbished market will cause a ripple effect, enabling companies like Apple to drive down pricing in their product portfolios without resorting to pushing through the next new, lost-cost product launch.

“This will be particularly useful for companies targeting emerging markets in the years ahead to help both expand their brand reach and addressable market.”

ABI notes that Samsung is the leading global smartphone and handset vendor, with its expansive portfolio allowing it to claim stake to a larger addressable market.

ABI, however, also notes that this range is putting pressure on Samsung’s margins, suggesting that this is the main reason behind its decision to scale back on the sale of old models, providing an improved mix of new launches to increase the blended average selling price this year.

The Asia Pacific region will continue to drive overall growth, projected to account for more than 50 per cent of sales through to 2020, while ABI states its research shows Africa will show the greatest growth rate over the next five years, while also becoming the second largest handset shipment region from 2016.

ABI states that, regardless of the region, “market leaders will need to take necessary, forward-thinking measures in the years ahead if they wish to retain healthy margins and stay on top in a market that is becoming increasingly commoditised and is clearly reaching saturation despite the billions of new handsets being sold each year”.

“Apple and Samsung are very successful in maintaining margins so far, but many others are beginning to fall by the wayside, notably Blackberry, HTC and Sony,” McQueen commented.

“It will be those that can control costs, create quick and sustainable differentiation, and establish new business models – such as those being touted by Xiaomi and Jolla – that will remain competitive and resilient to the expected ongoing market pressures.

“Support for reverse channel business models that embrace the refurbished market will be an important part of that mix.”