34% of respondents will wait longer than usual for their next smartphone purchase

42% of prospective iPhone buyers have postponed their next purchase 

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – August 05, 2020

According to the latest Consumer Lens survey conducted by Counterpoint Research, people in Germany are planning to trim the budget for their next smartphone purchase. Lockdowns across the nation due to the prolonged presence of COVID-19 forced people to stay at home. While many jobs in Germany were preserved through furlough schemes, the pandemic has affected the economy and consumer confidence. As a result, 34% of survey respondents plan to delay their next smartphone purchase. More than half of these further plan to reduce the amount they intend to spend on a future smartphone purchase. More than a fifth of respondents intend to cut their budget by more than 10%. However, the majority (~70%) are planning to buy a phone costing more than €270. The extent of reduction in budget varies with age, occupation, and future brand preference:

• Nearly 40% of male respondents plan to cut their budget for the next smartphone; higher than for females.
• 37% of salaried respondents intend to trim budgets for future smartphone purchases.
• While around a quarter of respondents under the age of 25 plan to cut their budget by no more than 10%, those aged above 25 are more frugal, expecting to reduce their budget by more than 10%.
• Prospective iPhone buyers are most affected among the top smartphone brands, with more than 40% looking to postpone their next purchase as well as cut their budget.

Commenting on this trend, Counterpoint Research Associate, Arushi Chawla said: “34% of the respondents are looking to postpone their planned purchase of a smartphone. Further, the impact of coronavirus has been deep enough to create uncertainty about future income. Due to this, the delay in the next purchase varies between different income groups. 43% of the non-working and 35% of salaried respondents will likely postpone their next smartphone purchase with males more likely to postpone than female respondents. We were surprised that prospective iPhone buyers are intending to postpone purchasing and/or cut the budget more than prospective buyers for other top brands. This is not the behavior we have seen in other European markets"

Brand-Wise Cut in Smartphone Budget by More Than 10% Due to COVID-19

Source: Counterpoint Consumer Lens

The study also sheds light on the portion of respondents who want to boycott Chinese-origin smartphones. Respondents under the age of 35 are more prompted to explore smartphones manufactured outside China. Also, many (36%) of the salaried respondents will be strictly looking for a smartphone other than from China.

Commenting on the issue of smartphone manufacturing location, Counterpoint Research Senior Analyst Pavel Naiya said: “Many consumers globally look at China as a starting point of the pandemic. However, most respondents from Germany are not bothered about the manufacturing origin of their smartphones. Many seem to believe that most smartphones and their components are, in any case, coming from China. Other than a few international brands, most of the leading smartphone brands can trace their origin to China. However, the coronavirus pandemic has promoted the diversification of manufacturing and supply chain mechanisms for many leading smartphone brands to reduce the dependency on one country.”

Naiya added, “Around a quarter of respondents are unaware of the origin of their smartphone and look forward to increase awareness on the matter. This brings an opportunity for many global and regional players to increase awareness among these consumers. With respondents postponing and/or cutting their budget, the dynamics might change for the German smartphone industry in the short run. However, to make a long-term impact on consumers' perception will be an uphill task.”

If you are interested in a detailed analysis of app spending and other smartphone consumer behavior, the full report is available for subscribers on our research portal.

Methodology:

The Consumer Lens survey was conducted among smartphone users in seven countries during May and June 2020. The consumer opinions are drawn from a heterogeneous group in terms of age, monthly income, gender, and occupation. Data points were selected which abided with all the logical checks throughout the analysis section and gave a better representation of the ongoing smartphone trends and future purchase intentions.

Analyst Contacts:

Pavel Naiya

Arushi Chawla

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