Smartphone Prices Soar

By Douglas A. McIntyre Updated Jan 12, 4:08AM EST · Published Jan 25, 6:55AM EST

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Smartphone prices rose 10% in the fourth quarter of 2017, compared to the same quarter a year earlier. The rate of increase was a record. Research firm GfK reported:

Global smartphone demand grew one percent to 397 million units in 4Q17

Average sales price increased by 10 percent year-on-year

Smartphone demand in 2017 totaled 1.46 billion units, generating revenue of USD 479 billion

Global smartphone sales reached 397 million units in the fourth quarter of 2017 (4Q17), a one percent increase year-on-year. Demand was primarily driven by Middle East and Africa, which experienced eight percent growth, and Central & Eastern Europe, where demand grew seven percent. Global smartphone average sales price (ASP) increased by 10 percent year-on-year to USD 363, its fastest quarterly growth

What smartphone companies can no longer gain in unit sales, some are making up on margin.

China was the market that posted the largest sales for the full year. That’s no surprise because of the size of its wireless subscriber market. Smartphone unit sales rose 454 million, a growth of only 1%. However, revenue rose by 14% to $152 billion. “Emerging Asia” sales were next at 232 million units, up 8%. Revenue rose 24% to $42 billion. North American sales ranked third, but up only 2% to 198 million units. Revenue rose only 1% to $84 billion.

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The uneven growth in unit sales last year is related primarily to a slowing in the huge U.S. and Chinese markets. Growth is more robust in Emerging Asia, Central Europe (85 million units, up 9%) and Latin American (up 9% to 116 million).

Global smartphone sales have moved from a market share battle, which was waged when smartphone units sales were still rising, to a competition over price. That favors companies like Apple Inc. (NASDAQ: AAPL), which has had the most expensively priced smartphones in the world and, by some measures, the best profitability.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.