The network is also offering a limited-time discount of £360 on selected mobiles for all customers, as well as an additional £70 upfront saving on some phones, including the Samsung Galaxy S23 5G 256GB, for existing customers. Both offers can be used in conjunction, meaning existing customers can save up to £430.

VMO2 says demand for refurbished mobile phones is up 36 per cent since 2021. Last year, O2 saw a year-on-year rise in purchases of refurbished phones. Like New phones are available on both Classic Plans and Plus Plans.

Customers who purchase a Plus Plan contract get a three-year handset warranty.

Phones sold under the ‘Like New’ program undergo at least 40 quality checks for the screen, microphone, flashlight, volume key, speaker, camera, battery, and fingerprint scanner. Customers who purchase a Plus Plan contract get a three-year handset warranty. Classic Plan users get a one-year warranty with 14 days to exchange or return

Data from GfK UK’s Tech360 survey reveals the rise in sales of used mobile phones. One quarter of those who bought a device in 2023 chose a refurbished or second-hand model, up from 19 per cenrt in 2021.

According to analysis of GfK UK’s Tech360 survey, the majority of used handset buyers cite finance as the primary motivation for their choice, with around half of over 35s more likely to state this as a key consideration. While price is important for buyers under 35 years old as well, they are more likely to mention the impact on the environment as a reason to buy a refurbished phone per cent.

However A YouGov survey of 2,544 adults has revealed that while most people had heard of refurbished phones, only six percent currently own one.

YouGov said, 70 percent of those who knew about refurbished handsets were unsure which networks provided them. while there is considerable awareness and some interest in refurbished handsets, significant barriers remain. Half of the surveyed sample said they were unlikely to consider a refurbished phone as a replacement. Only one in five (22 percent) considered it likely they would change their current phone for a used later model.

Virgin Media O2 Circular Economy Manager Louise Whitaker and YouGov’s Olivia Bonito will be speaking at Mobile News two-day October conference Circular Summit and will reveal the network’s used device strategy and consumer research in detail.

Demand for refurbished mobile phones is up 36 per cent since 2021 according to analysis of GfK UK’s Tech360 survey

While the vast majority of consumers chose a new handset, the UK’s used handset market is on the rise. Most used handset buyers cite finance as the primary motivation for their choice,. Around half of over 35s are more likely to state this as a key consideration. Price is important for buyers under 35 years old but they are more likely to mention the impact on the environment as a reason to buy a refurbished phone.

Longer replacement cycles for new mobile phones are also contributing to the rise in used sales,.

Last year was the first time that the largest share (35 per cent) of new buyers had smartphones that were two to three years old. In 2022, buyers with devices that were one to two years old were still dominant.  

GfK UK Director for Telco at  Lizzie Bailey says: “GfK’s long-term sales and consumer behaviour tracking shows that consumers will pay more for advanced features. But if the innovation leap is not far enough, they will wait for something new before buying their next device. This helps to explain the rise in demand for secondhand and refurbed phones.”

The most common reason someone buys a new mobile handset was they felt it was time for an upgrade.

GfK says in 2023, when it was time to upgrade their phone, roughly 32 per cent of buyers chose a brand new model. Twenty five per cent chose refurbished, and just over 15 per cent opted for a second-hand device.

GfK’.s analysis is that UK’s used mobile phone market is split into second-hand and refurbished. The refurbished market is aimed at buyers wanting to upgrade their phone to one with newer features but for less than the cost of a new handset. Buyers of these devices tend to be affluent, and younger and shop online at specialist retailers who offer warranties.

“With a cost of living crisis, new mobile phone buying patterns are emerging. In 2022 we reported that smartphone contracts were seeing a comeback as subscribers committed to longer terms to manage rising prices and lock in the best tariffs”, says Bailey.

“Now we’re tracking rising demand for used handsets, whether refurbished as a way of upgrading to a superior model for less or picking second-hand devices to keep costs down. They say ‘necessity is the mother of invention’, and with mobile phones so vital today, canny consumers are finding cost-effective ways to upgrade and replace their devices. Manufacturers, operators, and retailers need to stay ahead of these behaviours and respond to the opportunities they present.”

Last year, the global smartphone market was fairly stable, with a slight increase in revenue of 0.1 per cent versus 2022. By the end of the year, the market began to recover, with revenues in the second half of the year up 4.2 per cent year-on-year

.

Handset sale volumes are at an all-time low, and declining at 6.6 per cent year on year due to the cost of living crisis, says consumer goods data and intelligence provider GfK. The good news is many consumers still want the latest mobile phone. This has pushed sales on the premium and flagship sector explains GfK key account director for Telco Tech and Durables Lizzie Bailey.

“In Q3 of this year, more than a quarter of handsets purchased were worth £800 or more with is price band therefore growing considerably by 30.9 per cent year-on-year. With premium devices becoming ever more expensive, these consumers are still purchasing devices and are driving up the revenue in the market.

“From a value perspective the market remains in growth of 1.8 per cent Q3 22 compared with Q3 21. Most commonly these have traditionally been purchased on a long-term contract. While this is still the most common way of purchasing a handset, it is in decline, shrinking 8.6 per cent n volume terms in Q3 this year.”

“Consumers are becoming more aware that they can decouple their handset and tariff purchase. They are leaning more towards either purchasing their handset outright or on a separate handset financing Sim-free contract. SIM Free suffered in 2022 but has returned to volume growth of 4.4 per cent in Q3.”

Contract Sales

GfK says that, volume terms, handset sales are muted. Contract has been declining for much of the last 12 months, and Sim Free is only just returning to growth within the last quarter after a poorer performance in the first half of 2022 following years of buoyancy.

“A more resilient segment of the market is Contract SIMO, when they have decided to hold on to their handset. This is becoming increasingly commonplace as handsets become more expensive and consumers look to maximise their investment before upgrading”, says Lizzie Bailey.

“Contract SIMO New and Contract SIMO upgrade have seen year-on-year growth of 6.2 per cent and 2.1 per cent in Q3 2022, albeit this is down on the larger volumes seen in the first half of 2022. Contract SIMO New has been at record high levels throughout 2022, while Contract SIMO Upgrade has recently dropped off after a strong few months from March to June.”

• Data Source: GfK Market Intelligence Data: Sales Tracking. Country: GBProduct Group: Smart-Mobile Phones; Mobile Tariffs. Period: Q1 13 – Q3 22. Market: GfK Panel Market (80% Coverage)

techUK’s new report in partnership with GfK has found that while the smart home has become more of a reality for households in the past year, barriers to purchasing such as cost (59 per cent) and privacy (51 per cent) remain. 

The study showed that demand and consumer appeal rose during the pandemic and COVID-19 saw UK consumers buying 21.8 million smart home devices, a 22 per cent rise in volume, with smart TVs and speakers leading the higher sales.

This comes as the pandemic has increased Asia-Europe shipping costs where many smart home devices are produced. GfK data shows prices are increasing and this trend is set to dampen consumer demand even further.

techUK set out a series of recommendations for the government and the wider industry to support continued deployment of smart home products: 

• While “smart home” is a familiar concept to consumers, tech firms and retailers should focus on communicating the tangible consumer benefits of smart and connected home devices and to reassure consumers on ease of use, interoperability, and privacy  
• With interoperability a mainstream concern for consumers, it needs to be a priority for manufacturers. Failure to address these risks seeing reducing demand, increasing frustrations and creating a perception that smart home tech does not meet expectations 
• Regulation and policy on product safety, cyber security, and net zero need to be aligned. All the various policies and strategies need to complement each other and be trusted by stakeholders. With the UK developing so much policy post-Brexit, there needs to be real care and attention to consistent approaches and shared goals 
• Government should promote smart appliance adoption in the UKs future product policy framework. Smart appliances that support a flexible energy system and offer safety advantages should be seen as routes to meeting climate, energy and product safety goals 
• There needs to be a stronger understanding of how smart home tech can play a key role in delivering a fully flexible energy system.  

Following the recommendations would help the smart home market grow from $78bn this year to $182bn by 2025.

techUK head of devices Craig Melson said: “The pandemic has really demonstrated how important digital technology has become in keeping us connected, entertained, productive and educated, and the data shows how familiar the public has become with smart home tech. People really see the benefits of connected devices now and the challenge for tech firms is to make sure all the devices work together and instil the highest possible confidence that it will just work.”

Mobile accessories distributor Juice sold more Apple lightning cables than Apple did in the UK last month according to data from GfK.

It was the first time Juice has claimed top spot, as the Banbury-based company claimed 10.4 per cent market share.

Juice beat Apple to top spot and also established accessories specialists Belkin, both with 9.6 per cent and 9.2 per cent respectively.

In total, GfK statistics revealed that 510,000 units were sold across the cable market last month, as consumer spend hit £5.4 million.

Commenting on the successful month, Juice CEO Jolyon Bennett said: “It’s been an incredible start to the year with the news that our cables have officially outsold all of our competitors, including Apple, who are also our partners. This is a huge coup for us.

“We have continued to maintain a strong focus on developing products that make a real impact on consumers’ lives, which is why we remain at the forefront of an ever-changing market today.”

Juice sold around 90,000 units of accessories last month, with the distributor’s products available across a number of retailers including Argos, Boots, Carphone Warehouse, Halfords and Sainsbury’s.

Samsung officially announced the release of its latest flagship range the S20 and the foldable Galaxy Z Flip at its Galaxy Unpacked event in San Francisco on February 11.

The vendor revealed that the S20 would also have two other versions, the S20+ and S20 Ultra – with the models priced at £799, £999 and £1,199 respectively. The phones will be available in the UK from March 13.

All three phones are 5G-compatible and can be pre-ordered from each of the country’s mobile operators, as well as MVNOs Sky Mobile and BT Mobile.

The Korean vendor’s unveiling of the Z Flip also gave the audience a look at the world’s first foldable glass smartphone – a direct rival to the Motorola Razr.

The phone, which is not 5G-compatible like the flagship devices, was released on February 14 and retails at £1,300.

Samsung has previously held similar events just before the annual Mobile World Congress in Barcelona, whose cancellation analysts believe the company will feel relatively relaxed about. Samsung’s stock is likely to be less impacted than that of some of its Chinese rivals, with most of its devices manufactured in Vietnam.

Mobile News gathered the views from observers and analysts to see how the new device range compares to its predecessors and competition.

CCS Insight chief of research Ben Wood:

Samsung is continuing its metronomic updates to its Galaxy flagship devices with the S20 family.

The challenge, which it faces together with all other smartphone makers, is how to stand out from the endless stream of similar-looking black touchscreen rectangles.

The support for 5G across all three variants of the S20 line-up is a key element, ensuring customers are getting a future-proof purchase – and the camera certainly stands out, particularly on the Ultra.

With some aspects of the camera on the S20 range, such as the zoom capabilities, the vendor is merely in catch-up mode with some of its Chinese rivals, which have been using stacked-periscope zoom modules for a while.

However, little touches such as single-take mode, the smoothness of the zoom as you multiply the magnification, and the window-in-window viewfinder when you take pictures at 30x zoom and more, are innovations for which Samsung should be applauded.

The vendor has a unique window of opportunity with these new products. Arch-rival Huawei is still encumbered by being on the US Entity List and Apple lacks a 5G variant of the iPhone. Samsung can position the Galaxy S20 family as the ultimate Android smartphones that also deliver a future-proof purchase, given the support for 5G, 8K video and an advanced camera.

Samsung learned some tough lessons with the first iteration of the Galaxy Fold, but subsequently created a product that has defied the critics, proved more robust than expected and sold hundreds of thousands of units.

The Galaxy Z Flip builds on that experience, and it is immediately apparent that Samsung has gone to the next level in terms of hinge design and the finesse of the product – in particular, the folding glass that protects the display.

The Galaxy Z Flip is a different beast to the Galaxy Fold: this time, it’s a true folding smartphone rather than a smartphone with a mini-tablet hidden inside. I think this will be hugely appealing given how big flagship phones have become – so I’m pretty confident the Flip is destined to be a hit in the foldable niche despite its price.

Comparisons are doubtless going to be immediately drawn between the Galaxy Z Flip and Motorola’s Razr reboot. It’s hard to argue with the nostalgic appeal of the Razr, given the strong heritage of the brand and the industrial design – but in terms of technology maturity, Samsung certainly has the edge, having already delivered two iterations of the Galaxy Fold.

And although Motorola beat Samsung to the punch with the Razr reboot, we believe Samsung has the scale to take the concept beyond an extremely expensive niche, despite the high price tag the Galaxy Z Flip unsurprisingly commands.

uSwitch head of commercial for broadband and mobiles Ernest Doku:

Samsung has thrown everything, including the kitchen sink and a pail of water, at the S20 camera as it bids to become a picture powerhouse. This family of phones really is all about the camera.

The basic model has three cameras – a 12MP wide, 12MP ultra-wide and 64MP telephoto lens.

In place of the standard wide lens, the Ultra boasts a monstrous 108MP camera that will dramatically improve low-light performance, and a function called ‘space zoom’, which combines the phone’s 10x optical and 10x digital zoom to create the equivalent of a whopping 100x zoom.

The S20 enjoys a 4,000mAh battery, up 18 per cent from the S10, while the Ultra has 5,000mAh capacity – Samsung’s biggest phone power unit yet.

On the video front, the S20 allows you to record in 8K, an ultra-high resolution that will give it bragging rights over the iPhone’s video capability.

Price-wise, the S20 range is on a par with the iPhone 11, giving smartphone lovers a difficult choice when they come to pick their next device.

Samsung’s flagship models have long been burdened by the expectation of being an ‘iPhone killer’.

However, this time the Korean manufacturer appears to have ignored that rivalry, pulling out all the stops to make arguably the best range of Android devices for a new decade.

GfK global director Imran Choudhary:

The S20 range is moving in a positive direction, where it is expanding and moving into the super-premium range in terms of specs. This release solidified the vendor’s premium position in the market and its intent to expand in that area.

We know consumers are holding onto their devices for longer, so the fact that the S20 range is 5G-compatible gives the vendor a chance to drive forward with 5G in the coming years.

This also gives Samsung an advantage because the range has an excellent battery life and camera quality, meaning it appeals to a wider audience. And, for example, the ability to record in 8K will undoubtedly make it a default choice among content creators.

There’s something in it for everyone, which I think was key to Samsung during the manufacturing stage of these devices. Whether it’s the 108MP camera or the single-take mode, I do think Samsung has marketed these phones extremely well.

With regard to the Z Flip, we’ve seen the folding format start to make leaps and bounds from where it comes from. It has a hefty price tag attached, but the innovation in that direction is most welcome and the vendor is committed to giving consumers more variety.

So I think it does appeal to audiences, with a premium also to be had on utilising a device that’s different from what everybody else has.

In addition, the fact that Samsung has had a lot more time to test the device compared with the Fold bodes well for customers. Consumers will flock to stores as they look to get a chance to play around with the device – and if it can deliver on the durability, it will be successful.

PP Foresight analyst Paolo Pescatore:

Samsung has a huge start over rivals in 5G, with a broad range of devices. There has been no better time for the vendor to increase its market share, given Huawei’s current woes and Apple being yet to release a 5G iPhone.

Support for sub-6Ghz mmWave technology and dynamic spectrum sharing ensure that its 5G devices will appeal globally. This is paramount, as mmWave is being positioned as the ‘best’ of 5G, a topic that will emerge as a strong theme throughout 2020 as telcos roll out networks.

All eyes are now on Apple’s launch of its widely rumoured 5G device later in the year and whether it will support sub-6GHz and mmWave technology.

Samsung’s latest foray into foldable devices underlines its desire to own this space. Also, it will hope the new device fares much better than its first foray, with the Galaxy Fold, which was fraught with issues.

While these innovative new designs are nice to have, they’re not must-have sought-after features among users.

Furthermore, they are prohibitively expensive. But new form factors will provide the content industry with exciting new ways to connect and engage with users.

CompareMyMobile mobile comms expert Rob Baillie:

Samsung has laid down the gauntlet with its latest flagship, sending a clear ‘top this’ message to Apple. The S20 places itself ahead of the iPhone 12 in terms of numerical value and, from what we can see and speculate, in the specs department too.

The screen sizes of the large devices in the range put the iPhone 11 to shame, with that device’s largest current offering only extending to a relatively meagre 6.5 inches. The S20 will also be the second flagship Galaxy to have 5G capabilities – while, conversely, Apple has yet to bring a single 5G phone to the market.

Samsung has often been known as a market leader when it comes to the camera quality of its handsets, but in recent times its innovation has fallen behind the likes of Huawei and Google.

The S20, however, looks set to revive its status as a camera giant, with features like the 100x optical zoom and 108MP camera sensor placing it once again at the front of the pack.

Not only is the camera of extraordinary quality, the 8K video recording means that the handset is as much a handheld editing suite as it is a phone.

Ostensibly, camera and screen size aside, there is little to differentiate between the three separate phones and, given the fairly substantial difference in price, the cheapest of the options is probably the most appealing.

As for Samsung’s second attempt to enter the folding handset market, one has to wonder whether the co-launch with the S20 was engineered precisely to hide the questionable design of the Z Flip.

The phone certainly seems to be a triumph of form over function, with the gimmicky, throwback style masking the fact that the handset doesn’t do an awful lot special – and certainly not for the eye-watering price. That said, it does look very swish.

It is still early days for 5G, following last year’s launches by UK operators, but it seems just a matter of time before the technology takes over as the country’s most popular mobile option. The new generation brings vastly improved data speeds, throughput and latency to customers, factors that will transform the way we use mobile data.

EE was the first UK network operator to launch 5G, in late May last year. Vodafone and O2 followed suit in July and October, respectively, with Three soon expected to launch its 5G mobile service after debuting a home broadband offering based on the new technology in 2019.

But strategies and network expansions for the new technology may not be plain sailing this year, given the political background in the country.

ABI research director Dimitris Mavrakis points out that despite 5G already being available in 70 UK towns and cities, an unstable economy caused by Brexit and other factors means operators are more hesitant to spend aggressively on souping up their networks than those in some other countries.

Mavrakis cites the more stable environment in South Korea, which he says has helped that nation become a frontrunner in 5G.

“South Korea has already been quick to bring 5G to consumers,” he says. “It is a tech-savvy country that hasn’t been affected by something as big as Brexit.”

GfK global director Imran Choudhary agrees – but he thinks that despite the challenging market conditions, networks in this competitive new-technology environment also have an opportunity to drive margins and buck the broader trend of declining ARPU. In turn, he says, this can provide OEMs with the opportunity of a much-needed boom amid stagnating sales.

“The networks will want to provide new and updated services and tariffs that benefit from 5G speeds and low latency,” says Choudhary.

“This will give them a chance to recoup some of the capital expenditure they have laid out in rolling out 5G, and at the same time help to push margins in the right direction in tough trading conditions.”

Global View

On a global basis, 5G is expected to flourish in the coming years.

Ericsson’s Mobility Report from November 2019 makes a series of bold predictions for the technology, forecasting that 5G subscriptions will soar to more than 2.6 billion by the end of 2025.

But despite the future promise, Mavrakis highlights that 4G still has major legs in the coming years before its replacement as the preferred mobile technology, serving as an anchor for 5G networks.

This is reflected in Ericsson’s report, which predicts that 4G subscriptions will peak in 2022 before gradually declining and being replaced by 5G.

“Current deployments for 5G are using 4G as a core network, even though there are enhancements to use standalone 5G networks,” says Mavrakis. “We do not expect 5G to replace 4G straight away, but rather to compliment it.”

At the same time, Canalys senior analyst Ben Stanton expects 2020 to be the year that 5G goes mainstream.

“It is the year that customers around the world will start to get their hands on affordable 5G smartphones,” he says. “Smartphone companies are going to bring out 5G devices running Qualcomm Snapdragon 700-series processors.”

Stanton believes gaining momentum on 5G is critical for mobile operators to recoup some of the billions they have spent on spectrum auctions and infrastructure buildouts.

Analysts say, however, that there remains a lack of understanding among consumers about what 5G offers – with a need for the technology’s benefits to be better communicated to audiences before they will flock to buy the latest 5G devices.

This is backed up by research carried out last year by CCS Insight on UK consumers – despite the analyst company reporting that awareness of 5G in the country is stronger than in 2018.

Just five per cent of respondents said they had never heard of 5G, down from 30 per cent in 2018. However, among those with awareness of the technology, more than four in 10 thought 5G would boost the battery life of their mobile phones and 30 per cent that it would result in cheaper phone bills.

Highlighting Benefits

CCS Insight director of consumer and connectivity Kester Mann thinks that UK users do not know enough about 5G to make an informed decision about whether and when they should upgrade to the technology.

“What are the advantages in terms of latency, speed, and better performance?” he asks. “I don’t feel the industry has done the best job of articulating the answers to these questions to audiences.”

Mann also doesn’t think 5G has the same pull for consumers that 4G had before its widespread introduction.

“I don’t think there’s the same incentive as there was in comparison to when we moved from 3G to 4G,” he says. “Then, data usage had just started to take off and 3G networks were struggling to cater to the demand on networks – whereas 4G is working well and has plenty of life left in it.”

Mann’s view is echoed by IDC vice president of devices for the EMEA region Francisco Jeronimo, who thinks that consumers will not hurry to replace their 4G-compatible phones with 5G devices until they are given a good enough reason to do so.

“If phones already run quite well on 4G and consumers have already spent £700 to £1,000 on a device, most people will not feel the need to rush the upgrade process in the coming months,” says Jeronimo.

“There won’t be any need to replace their phones, and they will stick with their current ones for a lot longer on a network they know works well.”

Marketing Need

Jeronimo believes that manufacturers and operators must show consumers the benefits of 5G. He thinks that once consumers begin to feel that their 4G devices are not fast or capable enough to deliver a good user experience is when consumers will make the switch.

In this vein, says Jeronimo, marketing will be key for these players, with the need to invest in pushing 5G and making tariffs and data plans as attractive as possible for customers.

Mavrakis, meanwhile, stresses the importance of good products. “It’s always devices that make or break any new technology,” he says.

He thinks that following the example of China – another country taking a lead on 5G – by making a number of mid-range devices available will help them appeal to a wide range of customers.

The expected addition of 5G on Apple’s next iPhone later this year could help further spur interest in the technology, after last year’s iPhone 11 came without this capability.

The company’s push into 5G may also be facilitated after the smartphone juggernaut resolved a lengthy legal dispute with chipset maker Qualcomm last year and signed a multi-year chipset supply deal.

For other vendors, meanwhile, 2019 was a big year with respect to 5G, despite the technology not being as readily available as some might have expected.

Huawei and Samsung comfortably led the other vendors on this front, selling 6.9 million and 6.7 million 5G mobiles in 2019 respectively.

And although 5G phones accounted for just one per cent of smartphone sales in 2019, this figure is expected to rise significantly in 2020 given Apple’s impending 5G release and smaller vendors fighting to gain traction in the race.

Challenger Chance

With the arrival of new technology as potentially game-changing as 5G comes an opportunity for challenger brands to also disrupt the smartphone market.

Choudhary believes smaller vendors such as Xiaomi, Realme and Oppo should ensure they have 5G at the heart of their products from 2020 and beyond to take advantage when the technology begins to reach more mass-market appeal.

“Consumers can only take advantage if handset manufacturers provide 5G-capable devices,” he says. “If challenger brands want to make inroads against their competitors, bringing 5G to the mid-tier price points could prove fruitful, as larger brands may focus initially on their flagships at the super-premium end of the market but will quickly roll this feature throughout their ranging – giving challenger brands a short time to make the mid-tier their own.”

Jeronimo agrees, saying that if smaller brands are able to develop cheaper devices with 5G capabilities, they can steal market share from some of their more popular rivals.

Although he contends that there is no way the challenger brands can compete with Apple and Samsung on 4G, the new technology represents a chance for emerging vendors to make an impression on consumers.

“5G can spotlight some of the smaller brands and open doors in some markets like the UK,” says Jeronimo. “For operators to make 5G a mass-market technology, they need cheaper devices – and that’s where smaller brands such as Oppo, Realme and Vivo come in.

“They can provide 5G handsets at cheaper price points, and that could make a real difference for them in such a competitive market.”

But ultimately, it is down to operators to extend their networks to make the most of the opportunities with the new technology.

Right now though, Jeronimo believes, it isn’t quite the right time from a consumer perspective to upgrade from 4G to 5G.

“If someone asked me if it is the right time to upgrade to 5G, I would say no; wait another year at least because prices will come down, networks will be available more widely across the country and there will be more devices at lower price points available quite soon,” says Jeronimo.

So while the year 2020 may be a key year for the development of 5G, the lack of services supporting the technology across the country could halt its immediate expansion.

Nevertheless, what happens in 2020 is set to be a key launchpad for more widespread distribution of the technology to UK users over the coming years.

Chinese vendor Realme has experienced a meteoric rise since it was founded in May 2018.

The company has made major strides in the smartphone market in its short lifespan, beginning with its expansion in Asian markets.

Realme achieved more than 800 per cent annual growth worldwide in Q3 2019, according to Counterpoint Research.

This means it is currently the world’s fastest growing smartphone brand, ranking seventh in the global market.

Upon launching last year, the Chinese smartphone manufacturer aimed its first product – the Realme 1 – exclusively at the Indian market, with a bid to rival Xiaomi’s dominance in the country.

Since then, Realme has risen to become the nation’s fourth-largest smartphone brand there, amassing 6.7 million sales in Q3 2019 according to IDC.

After branching out into China and other Asian markets, Realme entered Europe for the first time in 2019 with the release of the

Realme 3 Pro in June. By July, the company had established itself in 20 markets around the world, including the UK.

The Lowdown

Realme is owned by multinational Chinese firm BBK ElectronicsCorporation, which also markets smartphones under the Oppo, Vivo and OnePlus banners.

Originally beginning in 2010 as a sub-brand of Oppo, Realme has since become an independent brand and captured more market share in India than Oppo in the third quarter of this year.

Despite being such a fresh brand, IDC research manager Marta Pinto believes the company has money to spend on its growth and marketing, aided by its position as part of the BBK group.

She adds that its focus on a younger target audience could help bring it long-term success.

“It has a clear mission and is targeting younger consumers by not aiming for the ultra-high-end portion of the market,” says Pinto.

She says that Realme should ensure it is clear in explaining who it is and what it intends to deliver to its audience, helping convey its strategy of targeting the mid to low end of the smartphone market.

Prospects

Pinto thinks, meanwhile, that the underperformance of traditional brands such as Motorola and Sony paves the way for other vendors to launch more competitive products and offers to succeed in the UK market.

She points out that channels are actively searching for more partners, since they do not want to be so tied down to the dominant big brands and that gives room for Chinese vendors to capitalise.

“Traditional brands may have brand awareness, but there is space for new vendors otherwise Oppo and Xiaomi wouldn’t be in the market.

“Realme will continue to expand as it increases investment in brand awareness.”

X2 Pro

Most recently, the vendor announced the release of its latest flagship – the Realme X2 Pro – at the device’s Madrid launch in October.

At the launch, attended by Mobile News, Realme country manager for Spain Emilio Alvarez said the company has already garnered 17 million customers worldwide and is aiming to “create an identity for young consumers around the world”.

Levi Lee, director of Realme in Europe, meanwhile outlined the company’s plans to quickly become a household name in the region, saying: “We care a lot about the European market and are very ambitious in our plans to expand.

“We will gradually expand to more and more countries, and I can tell you that it will be very fast.

UK Ambition

“We are also ambitious and hungry for the UK market, as you can tell with the launch of the X2 Pro, which we will launch initially in only two markets in the world.”

The device debuted in the UK in November, following the Spain launch the previous month.

Realme’s latest flagship device, which features a 64MP quad camera with a 20x hybrid zoom, has become one of the most competitive mid-range flagships on the market today since its launch.

It also features fast-charging capabilities, in line with a major focus of previous parent brand Oppo.

Lee thinks that the phone, which retails from €399, was the perfect type of competitive mid-range device to introduce to UK audiences as the brand begins to gain recognition.

“If you talk about the general performance of other mid-range phones on the market, I think ours stands out,” he says. “It is very difficult to find a similar performing phone at this price.”

Standout strategy

In the UK market, which is currently dominated by Apple and Samsung, Realme will need to ensure that it differentiates itself to stand out on the budget scene if it wants to capture market share.

GfK global director Imran Choudhary believes that Realme needs a clear differentiated strategy to forge its own space and identity as a challenger brand in the UK.

“Realme is currently ranging its devices with a high level of spec at mid-tier price points, which certainly gives it a fighting chance of succeeding,” he says.

Choudhary expects that the company will seek to raise awareness through targeted brand activity and introducing new flagships in 2020, while it should also capitalise on its growing success through the aid of partnerships.

“Bringing its devices into the focus set of consumers is a key building block in becoming a household name and building brand value.

“We would also expect to see it broaden its distribution through partnerships with retailers.”

Readying for 5G 

Realme CEO and founder Sky Li announced earlier this month that all the new mobile phones it releases in China will now include 5G capability.

While the company will continue to release 4G phones to other markets around the world, this marks a major statement of intent for the young brand in terms of seeking to capitalise on China’s early adoption of 5G.

And PP Foresight analyst Paolo Pescatore thinks Realme is taking an intelligent approach with its recent decision in China.

“If you look at how many devices already support 5G in China and the fact that many more will launch next year, it is sensible for the company to concentrate on its core market, as well as any others where it can steal market share from rivals,” says Pescatore.

While Realme is unlikely to extend the policy of including 5G in all devices to the UK in the near term, Pescatore believes it is something the company may consider in the future.

“In the short term, this might represent a challenge, as users will consider purchasing a device supporting 5G,” says Pescatore.

“It is going to be a big year for smartphone vendors, with the new iPhone expected to support 5G, although not everyone will want a 5G phone, depending on prices, coverage and so forth.”

Pescatore expects subscriber adoption to pick up more from 2021 as networks become more pervasive.

New Release 

Realme has, meanwhile, teased the release of its first 5G-enabled smartphone, which will offer support to both stand-alone and nonstand- alone 5G.

Li said that Realme will be among the first handset manufacturers to roll out dual-mode 5G smartphones across all price ranges.

Realme has confirmed that the phone will be called the X50 and, while specific details about its launch are scarce, it is expected to be released in selected markets early next year.

uSwitch head of commercial for broadband and mobiles Ernest Doku thinks that despite 5G being in its early stages, Realme could learn from its competitors about how to attract attention to its 5G flagship when it launches.

“That technology today is still the preserve of early adopters, with the vast majority of devices available in the premium segment,” says Doku.

“Delivering smartphones with broad appeal at an eye-catching price point could really drive some of that initial traction which proves so important.”

Doku points out that similar types of mid-range devices such as Google’s early Nexus ranges and the initial OnePlus devices launched in the first half of this decade proved incredibly popular and could work as Realme’s template, since he believes that it also delivers

impressive specs at a low cost. Doku thinks that if Realme can replicate this in a world in which devices are becoming ever more costly, it could draw real interest to the brand and spur it into the future.

What is key for the company, according to Doku, is how it can stand out in a market saturated with similar-looking mid-range devices.

“Differentiation is more important than ever with few manufacturers – Chinese or otherwise – maintaining resonance in the eyes of consumers.

“That combination of spending to gain consideration from consumers and delivering a strong selection of devices is becoming increasingly important.”

What’s Next?

Realme has established its main European offices in Madrid and Lee thinks that Spain presents the perfect starting point for the company to build its profile in European markets.

As for what comes next for Realme, expansion in both Europe and Asia will surely be top of the agenda for the company going into 2020.

And Doku thinks that Europe presents opportunities for the Chinese vendor to do just that.

“In the rest of Europe, where price trumps brand, there’s great opportunities for growth.”

But, he says, the UK poses its own particular challenges. “In the UK, network adoption and ranging beyond high-street retailers are the key hurdles to clear for customer consideration.”

Ultimately, Choudhary adds on the future prospects for Realme: “What will be key to its success is how it plans to broaden its distribution working with retailers and, ideally, networks while focusing on the right consumer segments to accelerate growth.”

The mobile phone accessories space is one full of riches, with the sector expected to reach $107.3 billion by 2022, according to Allied Market Research.

Growing demand for accessories is being fuelled by factors including growth in smartphone adoption and rising disposable income in developing countries such as China, India and Brazil.

One of the biggest new players in this sector is Utah-based US company Zagg, which started operations in 2005 and now has aspirations to be worth a billion dollars.

The Zagg story started with a man called Phillip Chipping. In 2005, he was noodling around in his garage after receiving a watch as a gift, thinking about how to protect it from chips, nicks and scratches.

He found the answer in the form of a durable film originally made to protect military helicopter blades from high-speed damage.

A lightbulb moment later and the first InvisibleShield design was made: Zagg was born.

Invisible shield

A few months into business, the fortunes of the fledgling firm improved massively after the launch of a diminutive music player you might just have heard of – the iPod Nano – for which Chipping designed a new iteration of his product (see box at bottom of the article).

InvisibleShield soon became the biggest- selling screen-protection product in the UK, where it had a market share of 57 per cent between January and March 2018, according to GfK.

In 2010, Zagg branched out from its screen-protection range by adding Bluetooth tablet keyboards, tablet stands and special function keys. In March 2015, the company introduced the industry’s first foldable pocket keyboard for smartphones, and it now offers a full line of mobile accessories from screen protection to power.

Chipping left Zagg a few years after setting it up, joining screen-protection BodyGuardz when his non-compete clause expired in 2012. BodyGuardz claimed to be Zagg’s biggest competitor in the mobile protection market.

Giant

Zagg International’s general manager is Gavin Slevin (main picture), who is based in Shannon, Ireland. He has been with the firm for three years and says it has set out a four-year plan to reach its goal of becoming a billion-dollar giant.

Slevin was in charge of Zagg in Africa, the Middle East, Israel, Greece and Turkey before being promoted to his current position in February 2017. Before Zagg, he was also at IT giant Dell for six years and at Samsung as a business manager.

In the last three years, Zagg has grown its revenues by around 30 per cent organically and through acquisitions, and is halfway to its billion-dollar goal. Last year, it more than doubled its 2014 performance by making $538.2 million (including $15 million from the UK and Ireland), with a gross profit of $185.9 million.

Zagg is aiming to dominate in more countries in the smartphone case segment, a product range on which it directed little focus until it spent $40 million buying Gear4 from mobile accessories company Strax in November.

In September 2018, Gear4 commanded 23 per cent of the UK’s smartphone case market according to GfK, putting it in first place.

Zagg plans to sell Gear4 cases to drive its ambitious sales goal, with Slevin saying the company is in a prime position now that it has strong offerings in screen protection, power, audio and cases.

“The overall goal is to be one of the two leading players in the smartphone case market in all the countries where we offer these products,” he says. “We want to take significant shares in other markets. In the UK we’re number one, but France, Germany and the Nordics are also markets we are actively targeting where we want to see the brand in that number-one space, or as a strong number two.”

Slevin adds: “Gear4 opened a whole new category for us with cases. With our distribution network and existing footprint of customers, we will be able to expand and fuel growth. We will take Gear4 to the Middle East, Africa and Asia, where we can compete for market share.

“We’re going to try to get all retail partners to buy all four of our product categories. We have many who buy from one or two categories, but not all four.”

Zagg accessories are sold in Carphone Warehouse outlets and all operator stores supported by Zagg’s distribution partners – Exertis, Kondor, Brightstar and Strax. In total, the company’s products are in more than 5,000 UK stores.

Slevin acknowledges that there will be challenges in meeting the billion target, not least because of a slowdown in smartphone sales of around three per cent worldwide, according to CCS Insight.

Upgrade cycles

While high handset prices and longer upgrade cycles are depressing new device sales, Slevin says mobile accessories won’t be hit to the same degree because people still need to protect the phones they have.

“Consumers can go through three or four screen protectors through the life of a phone,” he says. “Instead of replacing their phones, people are replacing the case so it feels like new. We have the opportunity to attach up to three accessories to a phone. You won’t see a massive drop-off in accessories just because handset sales are down.”

Zagg doesn’t have things all its own way in screen protection and cases, though, with strong competition from the likes of PanzerGlass and OtterBox. Slevin welcomes the competition, saying it makes the accessories market more global in reach.

“There is a lot of competition in this crowded space,” he says. “Otterbox is our biggest competitor in cases: I’d say they’re the top player in the world. We lead in screen protection in the UK, USA and Australia. PanzerGlass is the biggest brand competing against us in this area, and is just behind us in the EU.”

Zagg is an acquisitive firm, having spent more than £288 million since 2011 buying up market leaders with strong resources to bolster its portfolio. This included its purchase of the Braven outdoor speaker brand from rivals Incipio Group last July. With the buy came many patents that will be seen in Zagg products launching this autumn.

“Braven created the category of the mobile outdoor Bluetooth speaker range,” says Slevin. “The acquisition brought a lot of technical resources with it, and we’re excited about its capabilities and patents. We will continue to look for opportunities like Braven and are very open to more acquisitions that sharpen our technological advantage over rivals.”

Protection for foldables

Zagg has already developed screen protection for the coming generation of foldable phones and plans to launch its liquid-protection offering Liquid Defence in the UK this year.

“Until I saw the science behind liquid protection, I was sceptical – but not any more,” he says. “It uses nano beads. If you look at a piece of glass under a microscope, you’ll see lots of imperfections on the surface.

Liquid Defence fills all those craters and imperfections, and strengthens the glass, making it less resistant to cracking. It will be big for us when Samsung and Huawei release their foldable phones.

“Sales for protection of foldable phones will be slow to start with, as we are currently in the Stone Age in this area.

“High retail prices mean there will be a slow uptake, but there will be those who buy them regardless of price.

“And as soon as the cost tumbles, you’ll start to see more adoption.”

Zagg’s billion-dollar target is one that some will see as impossible – and even downright crazy. But it’s a goal that’s firmly in Slevin’s mind.

And a director at one of the company’s competitors, who did not wish to be named, says Zagg has deep pockets to achieve its goal.

“It is able to put £20 million behind a marketing campaign on new products and sell well, so it’s not impossible for it to achieve that goal,” he says.

“Zagg sells so well because it has a great number of top-tier brick-and-mortar retailer relationships, Carphone Warehouse being the biggest.”

One of the telecoms industry’s biggest international events has closed its doors for another year. Each year, the Consumer Electronics Show (CES) showcases the best consumer products the technology world has to offer.

Attendees at the Las Vegas event were treated to sneak peaks of AI goods and soon-to-launch voice assistants. The exciting possibilities for 5G were also very much on the agenda, though we may have to wait for next month’s Mobile World Congress for big announcements on that.

The colossal CES event takes up 2.9 million square feet of space and hosts 180,000 attendees. This included 6,600 members of the media perusing over 4,500 exhibitors, such as Samsung, Huawei, TCL and Nvidia, to name a few.

Between January 7 and 12, CES was mentioned a massive one million times on Twitter, featured in 49 million Snapchat stories and provided content for 224,000 Facebook videos.

Dominating the show’s themes were 5G, artificial intelligence and voice assistants. Although not a grand event for smartphones, with only a few new releases and most manufacturers more likely to opt to launch at next month’s Mobile World Congress (MWC) in Barcelona, CES serves as a pulse check on technologies that will dominate the industry over the next few years.

Unsurprisingly, 5G was a huge focus topic at the show, with the largest US operators piling in to claim a lead on the technology, as well as manufacturers such as Ericsson, Nokia and Qualcomm. South Korean operators are widely tipped to be the first to launch, with the US coming after. Businesses will see huge benefits from 5G, through faster download speeds, reliable connections and a decrease in lag times.

Talking about the event, CCS Insight chief of research Ben Wood highlighted that 5G will be an incredible asset for the world. He said, however, that many questions remain unanswered for now, with MWC lining up to be the main platform for major 5G disclosures.

“5G is happening; we all know that, everyone is investing in it and a lot people believe it’s going to open up a lot of opportunities,” said Wood. “Everyone is talking about it, but the problem is the networks and phones aren’t ready. Also, the business cases aren’t done yet. We know it’s going to be great, but there was nothing to show.”

GfK key account director Imran Choudhary agreed, saying: “With 5G certainly being a key focus for the telecoms industry, it was one of the buzzwords at CES – but there was little physical hardware on display from a mobile device perspective. As 5G is seen as an enabler for many other smart solutions, it’s being positioned as the foundation on which intelligent networks and services will be built.

“It will become the backbone for transportation and digital health systems, all driven by a 5G network working via 5G-enabled devices. Samsung did have a 5G mobile device prototype on display and made noise around the fact that it had received approval in the US to go ahead with its 5G devices this year. Qualcomm, too, shouted about its 5G-ready capability that will make its way into at least 30 consumer devices in 2019, many of which will be mobile devices.”

Independent technology, media and telco analyst Paolo Pescatore said: “The reality is there’s still plenty of capacity and opportunities in 4G. I’m worried about the 5G hype emerging with regard to consumer demand. What we learned from Verizon CEO Hans Vestberg’s presentation (left) is that operators are starting to change their tune and focus more on enterprise user cases and, in particular, the media industry, which will benefit massively from 5G in terms of efficiency and reducing costs.”

Flexi-phone

A major highlight for smartphone enthusiasts was the showcasing of the Royole FlexPai, the world’s first smartphone that can be bent in half. However, the device, which is currently available in China, was widely panned by critics at the show for being lacklustre overall, with an expensive price tag of around £1,000.

Chinese manufacturer Royole seems to have grabbed a head start on Samsung in terms of consumer launch. The Korean manufacturer announcing its Infinity Flex Display at its developer conference in November, but has not yet launched it.

But despite this lead, said Wood, “Royole has done Samsung a massive favour because it has set expectations extremely low for what flexible displays should be like. Anything Samsung launches will be much better than what Royole was able to offer.

“The FlexPai device is a long way from being ready for the mass market, but the range of curved and flexible displays on show at CES 2019 signalled an impending future where a range of surfaces and objects can become displays.”

For now, though, Wood pointed out that it is still early days for flexible devices, dubbing it the “Stone Age” for such products. Cost and fragility are substantial barriers that will need to be overcome, he added.

Choudhary said of the FlexPai that “the device, whilst clunky in some areas, is a breath of fresh air when it comes to the handset form factor most devices now adopt. No doubt the foldable phone will be a trend for 2019 and it’s going to be exciting to see how this form factor develops along with new use cases. Ultimately, it will be exciting to see how consumers react. The ideal use case for a foldable phone is very much to provide a larger screen when needed, and not to be a tablet that folds to create a bulky device. The FlexPai is the first step in this direction.”

AI push

A topic emblazoned on billboards on the Las Vegas Strip, TVs and the lips of attendees was AI. But Wood warns AI could be stumped before it peaks, with many brands stretching the definition in advertising such products.

He said: “I’m concerned AI is being massively devalued as a kind of technology. Everyone seems to be abusing the term and the technology by placing AI on everything. For example, LG claimed AI in its dishwasher will automatically order more dish soap when it runs low. That’s not AI, that’s the use of algorithms. The danger is that AI has the potential to transform our lives, but devices with this feature should deliver meaningful improvements over time.

“AI in smartphones has been brilliant. With the Huawei P20 Pro and Mate 20 Pro, there’s no question they deliver meaningful improvements to pictures that people take. For operators, AI will be hugely important in forecasting demand, minimising natural disaster effects and [signal] crashes.”

Pescatore added: “There’s no question that AI can benefit all industries; nearly every stand was promoting its services.

“Companies are really trying to promote the AI message among the consumer landscape, and that’s all about effectively articulating what it is because people don’t understand it. There are better ways in communicating it, but right now the industry is stuck on this.

“Most households are fragmented with their products. Ovens, TVs and dishwashers are made by different manufacturers, and getting them all to speak to each other is a challenge. The one thing that brings them all together is voice assistance.”