UK and Europe Show Strain #InThisEconomy
20 JUNE 2022 - Worries expressed by Wall Street are showing up in numbers from the UK and Europe. Two notes of note - one on smartphone sales and another on music subscriptions.
Counterpoint: Smartphone Sales Slump in Europe
Smartphone shipments in Europe did not have a good first quarter, according to Counterpoint Research. By that firm’s reckoning, the 12% year-on-year drop for the March-quarter yielded the lowest shipments since the first-quarter of 2013.
What was the issue? You name it. Counterpoint says:
The decline was caused by a number of factors, including ongoing component shortages, COVID-19 related lockdowns in China, deteriorating economic conditions and the onset of the Russo-Ukraine war.
Counterpoint Associate Director Jan Stryjak was quoted in the piece saying:
…existing issues such as COVID-19 and component shortages have been exacerbated by new economic and geopolitical challenges. Rising inflation levels across the region are impacting consumer spending, while Samsung and Apple, Russia’s first and third ranked smartphone vendors, halted all shipments into Europe’s largest market in early March 2022.
While those two make up about half of smartphone shipments to Russia, Counterpoint says:
…their combined shipments in Russia account for only 6% of total European smartphone shipments. The consequences of their withdrawal are, therefore, still relatively small on a regional scale. However, the impact of the war may develop wider ramifications if it leads to a drop in availability of raw materials, a rise in prices, further inflationary pressure and/or other vendors withdrawing from Russia.
Turning to specific vendors, Counterpoint says four of the top-five vendors saw shipments fall last quarter, though of the four that fell, Apple fell least:
First place Samsung saw shipments drop 16% y-o-y
Second place Apple saw shipments drop 6%
Third place Xiaomi saw shipments plummet 36%
Fourth place OPPO saw shipments drop 8%
Fifth place realme kept on growing, with y-o-y shipments up 67%
Kantar: UK Saw 1MM Music Subs Cancelled in Q1
On the music score (see what I did there?), the folks at Kantar Research say the first-quarter saw one million people in the United Kingdom cancel music subscription services. That’s according to a piece from Apple Insider. While several reasons were cited for the cancellations, including “technical difficulties, limited selection of music,” and too many ads, the biggest reason given was a need to save money. Quoting Kantar:
With inflation rising to 9% in the United Kingdom and further rises in the cost of living expected, the rising cancellation rates of music subscriptions is evidence that British households are starting to prioritise the spending of their disposable income.
Over 1 million subscriptions were cancelled in the last quarter, which has also seen the highest level of consumers citing they want to save money as the reason they want to cancel their subscription, at 37%.
