Smartphone market in Germany continues to grow

Xiaomi Mi Note 10

Despite difficult supply chains, the market for smartphones and mobile phones in Germany grew again last year and recorded sales growth of 4.4 percent to a total of 11.2 billion euros. GfK experts are also forecasting a moderate increase in sales for 2022. 5G and premium models remain important growth drivers. These are the results of GfK on the occasion of the Mobile World Congress 2022 in Barcelona.

"The German smartphone market ended 2021 with sales growth," explains Christian Riedl, GfK expert for telecommunications and technical consumer goods. "At the same time, it should be emphasized that sales in the second half of the year fell significantly compared to the same period last year and 11 percent fewer devices were sold. One reason for this is ongoing availability problems due to production and logistics bottlenecks. For 2022 it remains to be seen to what extent the supply chain problem will continue to shape the market. For this year, however, we forecast slight sales growth in the low single digits and a moderate increase in the average selling price."

5G and premiumization as drivers in the smartphone market

The global smartphone market already recorded higher average prices last year, and in Germany, too, consumers were primarily looking for faster or more powerful and therefore higher-priced models when making new purchases. As a result, the average selling price rose to 567 euros (2020: 501 euros; global average price 2021: 310 euros) and continued to bring sales growth to the German market despite falling sales. This is referred to as the effect of premiumization: fewer units were bought overall, but at a higher price. The trend towards premiumization was further reinforced by supply chain bottlenecks as manufacturers prioritized higher-margin premium devices in production. This led to better availability and a stronger presence of high-priced products in retail.

These premium devices usually also include smartphones with 5G functionality, which played a key role in the higher sales prices. While a 5G model cost an average of 805 euros in the fourth quarter of 2021, the price of products without this function was only 317 euros. With a growth to 59.2 percent share of 5G models in total German sales in the fourth quarter, this had a corresponding effect on the general average price of smartphones.

"Although 5G is an important topic for the future of the market and is already integrated into most important new products, it still plays a subordinate role for consumers as a product feature," says Christian Riedl. "According to gfknewron Consumer , only 17 percent of the consumers surveyed in the third quarter of 2021 stated that 5G was a decisive purchase criterion for them. The battery capacity (54 percent), the size of the internal memory (41 percent) and the quality of the camera (35 percent) and the display (34 percent) are also more important."

Increasing demand for wearables in the health sector

In addition to smartphones, wearables, which include smartwatches and fitness trackers, also play an important role at Mobile World Congress. With an increase of 20.8 percent to 0.9 billion euros, this product group recorded immense sales growth on the German market in 2021. This growth was mainly driven by the pandemic, because consumer awareness of the topic of health increased and wearables developed from a pure tech gadget to a tool for a healthier life. This is particularly evident in the sales figures for devices with corresponding sensors for monitoring health data, which were able to record above-average growth in comparison. Devices with a function for measuring the blood oxygen content, for example, were able to almost double their share of sales in the German market from 34.9 percent in 2020 to 66.9 percent in 2021. Devices that have integrated sleep monitoring were able to increase their share of sales from 70.5 percent to 92.4 percent. The high level of consumer interest also resulted in new products in the wearables sector: for example, devices with EDA sensors for measuring stress levels have been available since 2021 and have already achieved sales of 2.5 million euros in Germany.

In 2022, consumers will continue to focus on health. Accordingly, further sales growth in the wearables sector can be expected for this year.

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