Cell phone sales record a high that hasn't happened since 2016, says IDC Brasil

Arrival of the operating system to the simplest devices, the feature phones, leveraged the growth of 34% and surprised the market

The months of April, May and June 2019 were atypical for the Brazilian cell phone market. This is what the IDC Brazil Mobile Phone Tracker Q2/2019 reveals, a study by IDC Brazil, a leader in market intelligence, consulting services and conferences with the Information Technology and Telecommunications industries. In the period, 852 thousand units of feature phones were sold, the simplest cell phones on the market, a growth of 34% compared to the second quarter of 2018, a movement that had not happened since the third quarter of 2016, when the economic scenario made consumers look for cell phones cheaper and recorded an increase of 48%. As for the smartphone market, it also recorded a rise of 6.2%, with 12.1 million units sold, beating forecasts that indicated a drop of 6%.

According to Renato Meireles, Mobile Phones & Devices analyst at IDC Brasil, the surprising result of feature phone sales was driven by the entry of a new operating system for the category, KaiOS. KaiOS left the smart feature phones and started to serve the consumer who prefers simpler and easier to use models, but who also wants to use the applications that are already part of the Brazilian routine. With the innovations, the price of the cell phone increased by 4% and cost, on average, R$ 132. Revenue also grew and in the second quarter of 2019 it was R$ 112.7 million, 39.3% higher than in the same period last year .

The increase in the smartphone segment happened due to the renewal of the portfolio of some manufacturers. “Consumers have found devices with new features, well-differentiated specifications and much-awaited attributes in recent months”, informs the analyst at IDC Brasil. He recalls that the entry of new manufacturers in the country also marked the period. The average price was around R$ 1,252, which resulted in a turnover of R$ 15.1 billion, 15.6% more than the second quarter of 2018.

For the third quarter of this year, IDC Brasil's forecast for the feature phone market is up 31.4%. Smartphones, on the other hand, are expected to have a drop of 1%, due to the high inventory in the channels. According to Meireles, manufacturers should offer smartphones with lower prices – in the second quarter the average price rose 8.9% – and retailers should carry out promotions to stimulate consumption and lower inventories.

With the results of the Mobile Phone Tracker Q2/2019 study, IDC Brasil revised its expectations for 2019, and the forecast for the feature phone market went from a growth of only 0.4% to 26.1%, with 3.2 million cell phones sold. The smartphone market should close the year with sales of 45 million devices, a drop of 1.3%, little better than the negative balance of 2.4% initially projected.