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GfK: UK smartphone market is “bucking the trend”

Paul Withers
March 10, 2016

Market analyst forecasts that sales will continue to grow year-on-year despite global slowdown 

The UK smartphone market will “buck the trend” over the next two years, with unit sales set to grow by 5.5 per cent to 25 million in 2018.

This is according to leading market analyst GfK, despite claims the UK is set to be overtaken by India as the fourth most valuable market this year.

It has forecast smartphone sales of 24 million units in the UK in 2016 versus 23.7 million in 2015, with this figure rising by a further million in two years.

GfK predicts the UK will be overtaken as the fourth most valuable market this year, worth an estimated $13.08 billion, behind India ($14.81 billion), Japan ($16.20 billion), US ($70.04 billion) and China ($117.77 billion).

Challenging market
Global smartphone market growth has somewhat slowed recently, with even Apple predicting a drop in iPhone sales for the first time in its history during this coming quarter. CEO Tim Cook attributed the challenging environment to the declining global economy and currency rates.

However, GfK director of trends and forecasting Kevin Walsh (pictured) said: “The UK is bucking the trend a little bit in comparison to other markets, mainly because of the stronger economic environment and a higher consumer desire for smartphones.

“Globally, there have definitely been some sharp slowdowns but the UK is avoiding the worst of that trend. Its dynamics remain in the high-end, high-value segments, benefitting the dominant players such as Apple and Samsung.

“India is one of the fastest growing markets in the world and that has happened because smartphones have hit the sweet spot in terms of affordability in the market. They are already going through the feature phone to smartphone switch now.”

Strong 4G penetration
In 2015, 4G unit sales in the UK accounted for 71 per cent of the overall market. GfK is forecasting this will reach 77 per cent this year, 82 per cent in 2017 and 91 per cent in 2018.

Smartphone penetration in the UK was 73 per cent in 2015, with the market analyst forecasting this will rise to 76 per cent this year – meaning more than three quarters of users will own a smartphone.

The SIM-free market will continue to be one of the fastest growing in the UK, with three million units sold in 2016 compared to 2.8 million during the previous 12 calendar months.

Wearables boom
GfK is also forecasting that sales of wearable products will double in Western Europe this year, from 19 million to 38 million in 2016.

Walsh said the release of the Apple Watch last April has driven consumer interest, with manufacturers focusing
on health and fitness bands continuing to meet growing market needs.

“Health is a primary consumer concern and fitness trackers continue to meet those needs well. Smartwatches
are growing and also cover that need but there is a little more consumer desire for technology gadgets.

“The Apple Watch has helped drive the market and the user cases are developing as the improvement in sensor quality continues to increase, as well as pricing reducing as more products are released.”

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