The August to October months each year are eagerly anticipated by tech aficionados as major players like Apple and Samsung typically tend to launch their shiny new devices then. With both Android and iOS camps having their set of loyalists, it is also the time of the year when the internet gets flooded with brand wars and meme fests.
In Singapore, both operating systems remain popular, although overall Android pips its Cupertino counterpart. It is a different story with the Gen Z crowd, however, with nearly 1 in 2 (48%) preferring Apple compared to 44% for Android. For a premium brand, this is a big deal as it shows that Apple firmly remains in the mass market race, not limiting itself to solely the premium segment.
This year’s launch events, although much looked forward to as always, also come at a time when rising inflation is becoming an increasingly pressing concern with consumers looking to cut down on their expenses, particularly on those items that are considered luxury or nice-to-have. A Blackbox poll showed that the impact of inflation is being felt quite significantly in a number of categories, with tech products featuring among the top few.
Most Singaporeans are cutting down on tech spend
When specifically asked whether inflation/price rise will make them reduce their spending on tech products, an overwhelming majority of Singaporeans (86%) replied in the affirmative. This doesn’t augur well for an industry that is already under pressure for its environmental impact, compelling smartphone manufacturers to take a more sustainable approach to things even if it comes at a cost of reduced profits.
But manufacturers usually find a way to ensure the latter doesn’t happen. For example, when Apple decided to remove headphones and then chargers from their boxes, the explanation given was environmental benefits such as smaller boxes for shipping and lesser production of ‘unnecessary’ items. While that is true, it also led to massive profits for the company—USD 6.6 billion according to this report.
So, will reduced spending affect profit margins to a significant level? It is too early to tell and only sales reports post the launch of the iPhone 14 and various Android devices will put out the real picture. Early reports, however, do paint a optimistic outlook for the demand based on the waiting time for Apple’s latest offerings.
Our data shows that while the majority across gender and age groups are looking to cut back or restrict their spending on tech products, this behaviour is most pronounced amongst those aged 35 and above, with nearly 9 in 10 among them looking to do so.
Interestingly, 91% of men are more likely to cut back on their tech products expenditure while women, at 81%, seem comparatively less comfortable to do so. Women’s health was a major focus point in Apple’s event this year, especially when it comes to the company’s watch line-up, so perhaps it is banking on this consumer segment to further push its offerings?
The fact remains that the smartphone industry is by no means thriving. Not just inflation but other factors such as major supply chain issues owing to ongoing COVID-19 lockdowns in China are contributing to an uncertain outlook for this sector. While a 5% year-on-year growth is expected in 2023, this will be largely dependent on the extent to which the current woes ease up.
Blackbox Research can help transform such findings into specific actionable insights for your business. Interested? Reach out to us on connect@blackbox.com.sg.
Author: Blackbox Research Team
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