Annual Sales of Smartphones and Tablets Fall for the First Time in Brazil

Factors like high dollar and difficult year for the economy impacted the market, which only grew before

After five years breaking records, the smartphone market declined in 2015, falling from54.5 million in 2014 to 47 million units sold last year. The tablets also accompanied the fall: despite being a market very controversial, sales were still up in Brazil. Now, they fell 38% compared to 2014.

Information provided by IDC, pointing a culprit in common for the decline in the two sectors: the high dollar, which has led the manufacturers to do three to four transfers in the price of handsets throughout the year.

Especially in the case of smartphones, the impact was great. In 2014, the industry reached a record 54.5 million handsets sold, and had forecast growth of 16% in 2015. With the worsening political and economic crisis, IDC had already reduced the estimate for zero growth. But the end result was a decrease of 13.4%.

In addition to the high dollar, in the case of tablets, there is the fact that the product has turned superfluous. “The tablet no longer a novelty and, moreover, in the face of political and economic instability of the country throughout last year, with unemployment high and consumer confidence low, became secondary object of purchase,” says Peter Hagge, analyst research IDC Brazil.

The consultant explains that, with the US currency on growth, foreign companies began to leave the country and the tablets began to appear less in the stores. By combining this with the competition with smartphones, due to the higher prices and compatible screens, the fall was imminent. Worldwide, the forecast for the tablets was down 8% last year, according to IDC itself.

We have already discussed here if this market is in danger of extinction, and the statistics seem to reinforce this idea. Also in 2015, the consultancy predicted decline of 3% to 9.3 million units. With economic factors, that number jumped to 38%, with only 5.8 million units sold, compared to 9.5 million in 2014. Since 2010, the sector had always been growing.

there is still good news, however: the smartphone market revenue grew 1.2% compared to 2014, with an average price of R $ 880. In 2014, it amounted to R $ 750, which had helped popularize smartphones, as well as in 2013. Then the Brazilian consumer has to invest in more expensive devices.

“The increase in revenue was influenced by this new behavior of users who seek to have a second experience with the smartphone, opting for a more robust device,” says Leonardo Munin, an analyst at IDC. This also meant that the cellular life cycle increase of 1 year and a half to two years. According to IDC, this increase also reflects the sale of new devices.

Finally, the consultant points out that the last quarter of the year was weaker than expected, with sales falling 32% compared to last year. With 11.6 million sold smartphones and 1.4 million tablets, IDC points out that 2015 was an atypical year for the market. “Not the end of year celebrations and Black Friday were able to encourage consumption in the same proportion in recent years,” he adds.

Forecast for 2016: falls and more falls

Even with unfavorable political and economic environment, beyond the end of the tax exemption for smartphones, 2016 has no positive projection for the number of sales.The smartphone market is expected to shrink 13%, with 41 million devices sold. The tablets should suffer a further decline, down 29% to 4.1 million handsets sold.

Late last year we saw the sales incentive for electronics in Brazil be reduced even with a strong opposition from the industry. We explain here that the situation is much more complex than an increase of only 200 reais, and can significantly affect the competitiveness of industry and the sale of handsets. The rate of PIS / Confins, which with the Good Law was zero, now is 11.75% for computers, smartphones and tablets.

The price of these products in the retail, from the beginning of 2016 already showed the impact of the end of the grant. Smartphones Motorola that were famous for their affordable price, as the Moto G (3rd generation) and the Moto X Play, now out for R $ 1.1000 and R $ 1.7000, respectively. The latter saw an increase of R $ 200, while the Moto G rose R $ 250; both devices are no longer considered the best for its price range.

Both tablets as in smartphones, the share of Brazil in the number of handsets sold over the whole world became smaller. Smartphones sold here now represent 3.4% (previously 4.4%) worldwide, while the tablets correspond to 2.8% (previously 4.1%). In this case, the position in Brazil’s world ranking fell from 4 to 9 for the number of sales of tablets.

As for smartphones, Brazil remains the 4th largest consumer (!) In number of units, second only to China, the United States and India. Its representation in Latin America, however, fell: it was 42% in 2014 to 34% last year.