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NZ smartphone market: Who’s up, who’s down

3 min read

As in so many sectors, smartphone sales in New Zealand were shaped by the pandemic.

Apple was the number one smartphone seller in the NZ market during the September quarter. Despite selling far fewer handsets than the year-ago period, it was well ahead of Q3 2019 leader Huawei, whose sales collapsed amid international sanctions that have crimped its access to Google’s Android software and services.

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The market leader, like Samsung, was able to weather the year without any production or delivery delays as China – where most smartphones are assembled – rapidly returned workers to factories after staunch measures quickly quashed its Covid-19 outbreak.

But all-comers in the smartphone market have seen their numbers slide this year as the work-from-home trend has seen funds diverted to laptops – whose sales have been booming.

Total NZ smartphone sales slumped from Q3 2019’s 308,000 to just 155,000 – though on the plus side, things had perked up slightly from the 150,000 sold in Q2.

In Apple’s case, there was also another factor in play, at least for the September quarter: Regular buyers were waiting for the company’s annual upgrade, which this year landed in October as four models of the new, 5G-capable iPhone 12 went on to the market.

It’s too early to gauge iPhone 12 sales, but the addition of 5G might not have the impact it could have.

“The delay in 5G network upgrades has also limited the opportunity for smartphone vendors,” Garner says.

The level 4 lockdown over March and April saw a freeze on mobile network upgrades in line with government guidelines. When work resumed on 5G, Vodafone NZ and Spark both faced six-month waits for network hardware amid a Covid production and distribution crunch.

Samsung is looking to pep things up in the flat market with its heavily-promoted Galaxy S20 Fan Edition (FE), which costs $1099 – a keen price for a handset with top-shelf features (although the company chose not to include 5G in the version released for NZ). But again, it was released in October, so it will be a while before we see sales data.

Huawei NZ recently conceded that US sanctions, which ban it from full access to the Android store and various Google services, have hurt its consumer handset sales in NZ, while the GCSB’s ban on it from participating in 5G mobile network upgrades has hurt its commercial businesses. The Chinese giant’s local operation has made a pivot toward conferencing and solar products.

Gartner’s figures confirm the narrative: Huawei’s NZ smartphone sales halved against the year-ago quarter. Value-priced Chinese brands Oppo and Xiaomi failed to pick up the slack as Apple and Samsung booted their market share.

Worldwide, Gartner’s figures have Samsung at number one, with Huawei and Xiaomi – which remain strong in their home market – at two and three ahead of Apple in fourth place.

Apple is the only company with substantial service revenue tied to its handsets, however.

Gartner says Apple is set to cross the 600 million subscriber mark by end of 2020 across services from iTunes to Apple Pay, and is likely to reach close to US$60 billion in service revenue.

Apple recently halved the commission it takes on sales from its App Store amid regulatory pressure – at least for small developers.

Looking ahead, Gartner sees the company growing service revenue in the healthcare, entertainment, financial services and home automation markets over the next few years via apps and services tied to the iPhone, Watch and other hardware.

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