Technology Smart-phone - UBS Evidence Lab inside: survey shows positives for potential 2021E snapback

Results from the UBS Evidence Lab smart-phone survey of 6,800 consumers point to some stabilisation and even improvement in purchase intent in the US/UK but a weakening on a year over year basis in China and Germany.

04 May 2020

12-month forward smartphone purchase intent (year over year)

Source: UBS Evidence Lab

This bar graph illustrates the 12-month forward purchase intent (year over year) of survey respondents from US, UK, China, Germany, and Japan during the second quarters of 2015 – 2020.

UBS Evidence Lab 11th Smart-phone consumer survey

In March, field work was done for the 11th UBS Evidence Lab Smart-phone consumer survey (>6,800 consumers in US/UK/China/Germany/Japan). With low visibility, the survey helps shed light on market dynamics. In China where the economic impact was already being felt at the time of the fieldwork purchase intent over the next 12 months fell from 67% a year ago to 62%. Elsewhere given the economic consequences were less clear purchase intent was largely stable - we believe the impact is yet to be seen. We believe we will see a significant slow-down in smart-phone demand in 2020E (UBSe -14%) but that the survey lends support for our view that demand can snap back quickly in 2021E (UBSe +12%) with a rising age of device creating pent up demand.

Underlying smart-phone market dynamics support 2021E recovery

While the age of the installed base still rose slightly - we are no longer seeing much increase in the expected pace of replacement - implying in our view that we could see an increase in replacement demand in the market in the next 12-18 months supporting a 2021E recovery.

Feature-importance / 5G

5G ranks in the bottom half still of criteria smartphones users care about. Its weight has increased vs the October '19 survey, and should continue to do so as more 5G devices become available but this still goes somewhat against the market view that smartphone users have been waiting for 5G to upgrade. Foldable ranked bottom of features users care about and importance declined from the Q4'19 survey. Clearly only 700k foldable smartphones out there since 2019 some access is limited, but this indicates more convincing needs to be done for this to really take off as a new products segment.

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