Table of Contents
Executive Summary
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- Market overview
- COVID-19 expected to shock smartphone demand
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- Figure 1: Total unit sales and forecast of smartphones (millions), 2015-25
- Top takeaways
- Impact of COVID-19 on the smartphone market
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- Figure 2: Short-, medium- and longer-term impact of COVID-19 on technology hardware and smartphones, May 2020
- The issues
- Smartphone purchase intent healthy before COVID-19
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- Figure 3: Smartphone purchase intent, March 2020
- Strong brand loyalty for smartphone owners reduces consideration for alternative brands
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- Figure 4: Smartphone brands considered, by smartphone brands owned, March 2020
- Mobile network providers account for more than half of all smartphone sales
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- Figure 5: Smartphone purchase method, March 2020
- The opportunities
- Pro-replacement attitudes and parental status a key indicator for purchase intent
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- Figure 6: Smartphone purchase intent – CHAID – Tree output, March 2020
- Aspirational Owners and Trendy Owners key to success in the smartphone market
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- Figure 7: Smartphone owner consumer segments, March 2020
- 5G-capable models have the potential to trigger consumers to switch brands
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- Figure 8: Attitudes toward smartphones – brand, by smartphone brand owned, March 2020
- What it means
The Impact of COVID-19 on Smartphones
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- What you need to know
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- Figure 9: Short, medium and longer term impact of COVID-19 on technology hardware and smartphones, June 2020
- Opportunities and threats
- Financial impact of COVID-19 adjusts budgets and delays upgrades
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- Figure 10: Xfinity Mobile iPhone SE direct mail promotion, May 2020
- The hands-on experience is considered essential for many smartphone shoppers
- Upgrades to 5G smartphones are likely to be delayed
- Privacy concerns re-emerge from contact tracing app discussions
- Impact of COVID-19 on the smartphone market
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- Figure 11: Total unit sales and forecast of smartphones (millions), 2015-25
- How the crisis will affect key consumer segments
- Younger consumers bear the brunt of immediate economic impact of COVID-19
- Young urban consumers could drive a shift toward contactless mobile payments
- How a COVID-19 recession will reshape the smartphone industry
- Mobile phone sales remained resilient during the Great Recession
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- Figure 12: Annual % change in US mobile phone sales – smartphones and feature phones, 2008-12
- Refurbished/pre-owned market should gain prominence in economic downturn
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- Figure 13: Timing of most recently acquired smartphone and purchase method, March 2020
- Comprehensive bundles that appeal to specific lifestyles will draw consumers
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- Figure 14: Samsung S20 5G Series and Spotify Premium display ad, April 2020
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- Figure 15: iPhone SE and Apple TV+ promotional email, April 2020
- Figure 16: Samsung Galaxy Note10 and Galaxy Fit New Year Promotional Email, January 2020
- COVID-19: US context
The Market – What You Need to Know
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- COVID-19 shocks smartphone demand for 2020
- Smartphone ownership grows, even among lower-income households
- Sheltering in place could reduce battery frustrations that spur upgrades
- Consumer confidence plummets due to COVID-19
- Privacy concerns re-emerge with contact tracing discussion
Market Size and Forecast
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- COVID-19 expected to cause a steep drop in smartphone unit sales for 2020
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- Figure 17: Total unit sales and forecast of smartphones (millions), 2015-25
- Figure 18: Total unit sales and forecast of smartphones (millions), 2015-25
Market Breakdown
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- Smartphones overtake nearly entire mobile phone market
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- Figure 19: Mobile phone ownership and type of phone used, 2012-19
- Lower-income households increase smartphone ownership rates
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- Figure 20: Smartphone ownership, by household income, 2012-19
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- Figure 21: Smartphone and feature phone breakdown, by age and household income, October 2018-December 2019
Market Perspective
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- 5G rollout should spur upgrades in the longer term
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- Figure 22: T-Mobile 5G Instagram post, May 2020
- Figure 23: Verizon 5G Instagram promotion, May 2020
- Social distancing may reduce frustrations with smartphone batteries
Market Factors
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- COVID-19 hits consumer disposable income
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- Figure 24: First-time applications for unemployment (thousands), January-June 2020
- Additional disruption in supply chain could limit inventory for 2020
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- Figure 25: Percentage of people who have returned to work – China, February 2020 – June 2020
- Trade disputes hinders Huawei expansion into the US
- Privacy vs public health – which is prioritized by consumers?
- Consumer confidence drops alongside smartphone sales
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- Figure 26: Consumer Sentiment Index, January 2007-May 2020
Key Players – What You Need to Know
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- Apple’s iPhone lineup leads
- Samsung not giving on folding smartphones
- Apple launches a lower-cost iPhone for price-sensitive shoppers
- Google’s Pixel struggling to gain traction among US consumers
Smartphone Brand Shares
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- Apple continues growth in smartphone segment while competitors falter
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- Figure 27: Brand of smartphone owned, 2013-19
What’s Working
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- Apple’s brand allure has strong connection with younger consumers
What’s Struggling
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- Foldable smartphones flop
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- Figure 28: Samsung Galaxy Z Flip Instagram post, February 2020
- Google Pixel unable to crack 5% market share
What to Watch
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- Apple’s upcoming 5G smartphone will arrive facing established competition
- Samsung Access – Samsung’s smartphone subscription program
The Consumer – What You Need to Know
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- Apple leads the market in both ownership and purchase consideration
- Three quarters of owners’ smartphones are less than two years old
- More than half purchased their smartphone from a mobile network provider
- Battery improvements top desired smartphone features for shoppers
- Attitudes point to strong brand loyalty
- Two thirds of smartphone shoppers considering only one brand
Smartphone Brands Owned
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- Half of US smartphone owners have an Apple iPhone
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- Figure 29: Smartphone brands owned, March 2020
- Lower-income households opt for alternative smartphone brands
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- Figure 30: Smartphone brands owned, by household income, March 2020
- Youth enamored with iPhones
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- Figure 31: Smartphone brands owned, by gender and age, March 2020
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- Figure 32: Smartphone brands owned, by age and household income, March 2020
- iPhone continues to grow market share
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- Figure 33: Smartphone brands owned, January 2019 and March 2020
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- Figure 34: iPhone ownership, by age, January 2019 and March 2020
Length of Smartphone Ownership
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- Majority of smartphone owners purchased within the past two years
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- Figure 35: Timing of most recently acquired smartphone, March 2020
- Older consumers hold onto their current models longer
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- Figure 36: Timing of most recently acquired smartphone, by age, March 2020
Smartphone Purchase Method
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- Mobile network providers play major role in smartphone purchasing
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- Figure 37: Smartphone purchase method – New, March 2020
- Lower-income households more likely to rely on gifts or secondhand market
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- Figure 38: Smartphone purchase method, by household income, March 2020
- Apple Store experience plays a major role in iPhone sales
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- Figure 39: Smartphone purchase method, by Apple iPhone owners, March 2020
Smartphone Purchase Intent
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- Four in 10 planned to buy a smartphone within the year before COVID-19
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- Figure 40: Timing for next smartphone purchase, March 2020
- Household income doesn’t correlate with smartphone purchase intent
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- Figure 41: Timing for next smartphone purchase, by household income, March 2020
- Millennials are the most active in the market
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- Figure 42: Timing for next smartphone purchase, by generation, March 2020
Smartphone Brands Considered
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- Apple has dominant lead in smartphone consideration
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- Figure 43: Smartphone brands considered, March 2020
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- Figure 44: Smartphone brands considered, January 2019 and March 2020
- Apple and Samsung have highest brand reconsideration
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- Figure 45: Smartphone brands considered, by smartphone brands owned, March 2020
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- Figure 46: Smartphone brands considered, by smartphone brands owned, March 2020
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- Figure 47: Average number of smartphone brands considered, by smartphone brand owned, March 2020
- Two thirds of smartphone shoppers are only considering one brand
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- Figure 48: Breakdown of smartphone brand ownership and purchase consideration of single brand shoppers, March 2020
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- Figure 49: Breakdown of smartphone brand ownership and purchase consideration of single brand shoppers, March 2020
Desired Smartphone Features
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- Smartphone shoppers are nearly unanimous in wanting a better battery
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- Figure 50: Desired smartphone features, March 2020
- Camera improvements and innovations are a better draw among women
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- Figure 51: Desired smartphone features – camera, by gender and age, March 2020
- Multi-brand shoppers more likely to want 5G capabilities
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- Figure 52: Desired smartphone features, by single- and multiple-brand smartphone shoppers, March 2020
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- Figure 53: Desired smartphone features, by smartphone brand, March 2020
- Older consumers seek convenience and performance from their battery
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- Figure 54: Desired smartphone features – battery, by generation, March 2020
Smartphone Purchase Triggers
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- Non-buyers predominantly older consumers
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- Figure 55: Age breakout of non-buyers, March 2020
- Figure 56: Timing of most recent smartphone purchase, by non-buyers and age, March 2020
- Performance and usability issues will trigger the shopping process
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- Figure 57: Smartphone purchase triggers, March 2020
Attitudes toward Smartphones
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- Half of consumers say their smartphone is the most important device they own
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- Figure 58: Attitudes toward smartphones – smartphone importance, by age, March 2020
- Smartphone owners hesitant to switch brands
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- Figure 59: Attitudes toward smartphones – brand, by smartphone brand owned, March 2020
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- Figure 60: Attitudes toward smartphones – brand, by smartphone brands owned and age, March 2020
- Age more than income correlates with replacement attitudes
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- Figure 61: Attitudes toward smartphones – replacement, by age, March 2020
- Figure 62: Attitudes toward smartphones – replacement, by household income, March 2020
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- Figure 63: Attitudes toward smartphones – replacement, by age and household income, March 2020
- Parents with pro-replacement attitudes highly likely to purchase within the year
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- Figure 64: Smartphone purchase intent – CHAID – Tree output, March 2020
- Interest in convenience and innovations peaks among 25-34 year olds
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- Figure 65: Attitudes toward smartphones – innovations, by age, March 2020
Consumer Segmentation – Attitudes toward Smartphones
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- Figure 66: Smartphone owner consumer segments, March 2020
- Aspirational Owners (21%)
- Characteristics
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- Figure 67: Profile of Aspirational Owners, March 2020
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- Figure 68: Smartphone purchase method – used/refurbished, by consumer segments, March 2020
- Opportunities
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- Figure 69: Smartphone purchase intent – within the next two years, by consumer segments, March 2020
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- Figure 70: Profile of Tech Trendsetters (consumer segment from Wearable Technology), November 2019
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- Figure 71: Smartphone brands owned, by consumer segments, March 2020
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- Figure 72: Attitudes toward smartphones – brands, by consumer segments, March 2020
- Conservative Owners (27%)
- Characteristics
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- Figure 73: Profile of Conservative Owners, March 2020
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- Figure 74: Attitudes toward smartphones – importance and having an old smartphone, by consumer segments, March 2020
- Opportunities
- Mainstream Owners (29%)
- Characteristics
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- Figure 75: Profile of Mainstream Owners, March 2020
- Opportunities
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- Figure 76: Single and multiple brand shoppers, by consumer segments, March 2020
- Trendy Owners (23%)
- Characteristics
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- Figure 77: Profile of Trendy Owners, March 2020
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- Figure 78: Breakout of gender and ethnicity, by consumer segments, March 2020
- Opportunities
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- Figure 79: Attitudes toward smartphones – switching and texting, by consumer segments, March 2020
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Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Forecast
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
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