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Glow Points:
A good description of macroeconomic indicators is substantiated with statistics and underlying reasons.

A good analysis of the impact of the economic indicators on the smartphone industry.

Through your reflections, I am glad to read about your learning points of how each industry impacts our economy in terms of generating income and employment.

Areas for Improvements:
For GDP, it is important to state the overall growth rate.
In discussing the rising cost of production for smartphone manufacturers, you could have mentioned the worldwide shortage of microchips as one of the contributing factors.

Other points to discuss include:
The government measures to support the industry especially during the pandemic outbreak.
How significant is the industry to our economy? What are their contributions/

What is Next?
Consolidate key findings from both stages and start preparing your PowerPoint Slides.

Cheers!
Josh Nathan

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One thing that I really love about our group is that everyone is very cooperative, helpful and easygoing. We have great chemistry and get along well together. Working with the rest of the group was a pleasure and we had a lot of fun doing this project together. Although we delegated the work pretty fairly, it was nice to have friends who would offer advice and help even when it is not their part to worry about. We held very constructive and efficient meetings to go through each part thoroughly to ensure that everyone has takeaways in all aspects of the project.

One improvement for the team before our final presentation would be to do more things together to ensure that everyone will greatly benefit from each person/s research. (not that we have not but I feel that it is good if we could do a little bit more?)

With that said, I really enjoyed the process of this project as the objectives are straightforward and clear.

It was very interesting to research and learn more about our smartphones (and how APPLE is holding me captive -_-) I learnt a lot about Singapore's economy as well and learnt a lot of things that can be applicable in my future.

I like that I was able to apply what I learn in lecture and tutorials in this project which has enable me to better grasp the concepts of GDP, unemployment and inflation.

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Our group has been cooperative and efficient with the way we worked together this time round. Although we delegated work to each other, we didn't just limit ourselves to that and helped around with other parts as well to ensure the best quality of work is submitted. This helped us finish this part in a much efficient and effective manner.

One improvement for the team is to complete our work with a better planned time frame. With the better planned time frame, we will be able to work in a more organized manner. Other than that, our group is extremely cooperative and easy to work with everyone.

One thing I learnt through Macro-Analysis is how Singapore's GDP is made up of various small contributions. Regardless of size, they are of equal significance as well. Especially in the smartphone industry, there are so many ways it can contribute; e.g. employment. So many livelihoods in Singapore are depended on the smartphone industry, be it repair, accessories, sales, etc. I used to think the smartphones industry is not that important in Singapore but was proved wrong through this analysis. I was able to understand the concepts taught in class in a better way and see thigs in a different perspective from doing this project.

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I love how we managed to improve on our areas of improvement since the last time, we managed to complete our work without rush, and also help each other out when we need!

Doing the Effects of Singapore's Economy on the Smartphone Industry, I managed to learn how macroeconomics can affect an industry and to what extent it can, Consumer spending is often tied to GDP and Unemployment rates, thereby affecting the Smartphone industry if the overall economy isn't doing well, furthermore, the prices of smartphones have been going up constantly due to many factors that i have found and listed. This segment really answers my questions as to why things are getting so expensive today!

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I like how our group constantly stays on task and helps each other with any difficulties faced, how everyone tries their best to help one another out.

Our group now is actually working pretty well with no conflicts with each other's ideas, everyone is very open to corrections so, I'd say we're doing our best.

One thing I learned through this macro analysis is how each individual industry has its own contribution to the country's GDP, inflation, and unemployment rate. Recessions in the economy can happen under many circumstances and not just because of industry alone. For example, the global pandemic.
Dependence on firms from other countries is also the main factor for the industry to keep going. If there aren't enough supplies, it not only leads to a subtle failure of the company or industry but might affect the home country where that company lies in.
Lastly, research has shown how Singapore is slowly recovering from a slight recession due to the pandemic.

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After looking through the reflections of the other group members, I would say that the chemistry in the team has significantly improved and everyone has played a part in contributing, according to their strengths. Our communications have been much better ever since we started on the microeconomics section and we have progressed much more efficiently with clear cut communications. Additionally, there is a greater level of autonomy of decision-making as there were times some team members has their hands tied while doing the microeconomic analysis. However, our team can continue to improve on managing our team meetings wisely as there were several occurrence of team meetings being relatively unproductive and there was not much happening during the call which hampers progress.

One thing that I learnt and discovered from this macroeconomics analysis was the government policies that were put into place in order to support the smartphone industries, especially the scheme to help lower-income households and I can help to introduce this scheme in order to help them purchase an affordable phone. Other than government policies, I also learnt that Singapore is one of the locations where certain parts of our mobile phones come from and it never come across to me that Singapore, a tiny nation, would be a producer of some of the most essential components found in a mobile phone. An example of this is semiconductors.

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As of the fourth quarter 2020, the total consumer spending in Singapore amounted to 39.74 billion Singapore dollars. After a two-year low in the second quarter 2020, consumer spending in Singapore has started to rebound. The decrease in consumer spend in that period was likely due to the lockdown implemented in the country to slow down the spread of COVID-19.

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Singapore: consumer spending 2020 | Statista

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As of the fourth quarter 2020, the total consumer spending in Singapore amounted to 39.74 billion Singapore dollars. After a two-year low in the second quarter 2020, consumer spending in Singapore has started to rebound. The decrease in consumer spend in that period was likely due to the lockdown implemented in the country to slow down the spread of COVID-19.

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The statistic shows gross domestic product (GDP) in Singapore from 1986 to 2020, with forecasts up to 2026. Gross domestic product (GDP) denotes the aggregate value of all services and goods produced within a country in any given year. GDP is an important indicator of a country's economic power. In 2020, Singapore's gross domestic product amounted to around 339.98 billion U.S. dollars.

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Singapore - Gross domestic product (GDP) 2026 | Statista

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The statistic shows gross domestic product (GDP) in Singapore from 1986 to 2020, with forecasts up to 2026. Gross domestic product (GDP) denotes the aggregate value of all services and goods produced within a country in any given year. GDP is an important indicator of a country's economic power.

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a) General Description of Singapore’s economic situations in the last 3 years (2019-2021)

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a) General Description of Singapore’s economic situations in the last 3 years (2019-2021)

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Overall Economic Health

- Singapore is a major financial hub in the Asia Pacific region and is one of the world’s most advanced economies.

- It has an open economy and as a whole, is a free market where its economic freedom score is 89.7 in 2021. This ranks Singapore as the freest in the world for two consecutive years.

- Despite being a relatively small market with a lack of natural resources, Singapore's economy is one of the most stable in the world, with no foreign debt, high government revenue and a consistently positive surplus.

GDP

- Singapore’s GDP primarily consists of the service industry (about 70%) and goods production (about 25%) from 2019 to 2021. A minor percentage of about 0.03% comes from the agriculture industry. (statista.com)

- Singapore’s GDP is considered to be stable and high. This is reflected in the high standards of living of its citizens.

- However, Covid-19 greatly impacted the global economy and Singapore was not spared.

- The GDP of Singapore from 2019 to 2020 shrank inevitably from US$ 374.384 billion to US$ 339.998 billion respectively.

This is a drop of 5.8% which is a significant decrease that can be attributed to Covid-19 and the constantly skyrocketing infections which impacted the livelihood of many.

- The reason for this decline in GDP is mainly due to the global pandemic that caused massive economic disruptions. It was significantly illustrated in 2020 when Singapore recorded its worst full-year recession since its independence.

- The country had to cope with the dramatic fall in demand and supply, such as the lack of demand for goods and services produced in Singapore due to the economic slowdown in major economies and global travel restrictions, supply chain disruptions as well as the Circuit Breaker from April to June 2020.

- The major part of Singapore's GDP is made up of the tourism sector. Because of the travel restrictions that are imposed, air passengers and tourist arrivals are significantly lower during 2020, thus causing the drop in GDP.

- Uncertainty about the evolution of the virus with the new emergence of new variants, erratic and constantly changing restrictions globally as well as has led to the decrease in GPA because of inaccurate or less ideal economic decisions to combat the recession. (https://www.mti.gov.sg)

- According to Singstat, in the third quarter of 2021, GDP growth is expected to come to a 7% growth.

This is a good sign of economic recovery considering the recovery of the global economy although it does not align with pre-pandemic levels. (https://www.singstat.gov.sg/gdp#:~:text=The%20Ministry%20of%20Trade%20and,5.0%20per%20cent%E2%80%9D%20in%202022.)

- The pace of recovery for each individual sector varies. For example, the F&B industry is seen to be getting back to pre-Covid-19 levels after Circuit Breaker and the less stringent social distancing restrictions in Singapore.

This is in contrast to industries such as tourism which are predicted to remain below pre-pandemic levels at the end of 2021 as a result of restrictions on travel between different countries and people’s fear of contracting the virus.

- With many people losing their jobs or experiencing a pay cut due to the pandemic, more people are more thrifty and cautious and are more likely to save money or cut down on expenses. Thus, due to the lack of a secure income, many are deterred from spending lavishly and thus, the GPA decreases.

- Overall, the GDP of Singapore fluctuated due to the different challenges met each year from pre-pandemic in 2019 to Circuit Breaker in 2020 and is on the road to recovery after the economic trough.

Unemployment

- The overall annual average unemployment rate increased from 2.3% at the end of 2019 to 3.0% in 2020 which is a 30.4% increase due to the occurrence of the pandemic that caused a global recession which detrimentally affects the income of many workers.

Thus, it is not surprising that the unemployment rate has skyrocketed in 2020.

- However, the overall unemployment rate slowly shrinks as we advance into 2021 where the rate was 3.3% at the start of January 2021, going down to 2.6% in July 2021. (https://tradingeconomics.com/singapore/unemployment-rate)

- Overall, Covid-19 and the recession has changed consumers’ priorities especially in terms of the way they spend.

This causes a fall in demand for goods and services that are considered to be inelastic such as an expensive smartphone.

This then forces companies and employers to cut down on production which leads to an increase in retrenchment as to cut down expenses for the decrease in production levels.

- With more travel restrictions imposed, local employers who are in dire need of manpower would have to turn to hire locals as compared to foreign workers.

This means an increase in expenses for these employers who would have to pay higher salaries which would leave many employers no choice but to reduce the number of employees in the business, thus leading to unemployment.

- Furthermore, the pandemic has halted supply and production in many industries as health concerns. The circuit breaker in 2020 has led to many delayed projects and production.

The form of unemployment is Cyclical. It is caused by the lack of jobs during a recession and in this case, it's caused by the global pandemic.

Many companies also opt for the work-from-home system which has delayed production rates and thus, led to an increase in unemployment due to the lack of open job opportunities and tightening on manpower quota.

- However, employment rates grew as the economy started to recover since the plummet, with relief provided by the government which has helped companies retain their employees.

- In order to combat unemployment in the country, the government has put in place several support systems such as the Covid-19 recovery grant in hopes of helping individuals and small companies stay afloat during this pandemic.

Citizens are eligible to apply for up to $700 per month whilst in the search for new income means. This contributed to the decrease in the unemployment rate.

- The government also offers courses for the working population to further their skills or learn something new, especially if they are actively seeking employment.

These new skills that they have equipped themselves with would make them more employable and thus, these courses would aid the decrease of the unemployment rate.

Inflation

- The inflation rate in Singapore declined from 0.57% in 2019 to -0.18% in 2020 when Covid-19 struck. This is a decrease of 75%. (https://www.channelnewsasia.com/business/singapore-headline-inflation-turns-negative-since-2016-covid-19-929656)

In 2021, the inflation rate increase to 1.56% as compared to 2020.

CPI decreased by 0.7% in April 2020 from a flat reading in March 2020 due to larger declines in the cost of private transport, services as well as retail and other goods. This was all due to the occurring pandemic that happened.

- The increase in inflation in 2021 occurred primarily due to an increase in demand for food and services and a decrease in the cost of production of goods and services, mainly in the retail sector.

- Cost of services rose sharply in October 2021 mainly because of the higher inflation of airfares and holiday expenses with the ease of border restrictions.

- Higher car prices and housing rents while the core inflation (excludes rents and private road transportation costs) has also climbed to its highest in nearly three years.

- MAS and MTI highlighted that inflation in May rose to 0.8%. This is largely due to the low level of inflation during Circuit Breaker in 2020.

The rising inflation rate is in line with inflation across the globe. Inflation in Singapore is predicted to remain elevated in the near future as global and regional economic recovery continues to pick up.

- MAS and MTI said: "On the domestic front, the labour market recovery is expected to become more entrenched with the easing of COVID-19 restrictions and a pickup in economic activity."

(https://www.straitstimes.com/business/economy/singapore-overall-inflation-rises-to-32-in-october-highest-in-more-than-8-years)

- The demand-pull inflation greatly affects the rate of inflation in Singapore as it is a sustained rise in the general price level due to an increase in aggregate demand.

When aggregate demand rises, rate of production will increase which will lead to an increase in demand in the economy that results in an inflation of prices.

- Then, the cost of production will rise accordingly which will force firms to increase prices to maintain profitability. This results in a rise in the general price level.

- Demand-pull inflation is significant in affecting Singapore's inflation rate as exports in Singapore are increasing rapidly as the world economy is expanding.

- Singapore is a relatively small economy that is relies on external consumer base with the domestic exports making up a large proportion of the GDP (increase in exports = increase in aggregate demand).

Thus, an increase in aggregate demand --> large rise in the general price level.

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https://www.straitstimes.com/tech/smartphones/rise-of-mid-range-smartphones

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The half-time report for the smartphone industry makes for grim reading.

Market research firm IDC said last week that global smartphone shipments will drop by 18.2 per cent in the first half of this year.

This forecast comes on the heels of another grim set of stats from IDC - smartphone sales declined by 11.7 per cent, to 275.8 million units, in the first three months of this year compared with the same period last year. This is the industry's biggest year-on-year quarterly fall.

IDC predicts smartphone sales for the whole of this year will slump by 11.9 per cent from last year.

With the world in the throes of the Covid-19 pandemic, which has caused countries to impose lockdowns, leading to rising unemployment and a worsening economic outlook, many consumers are not buying new smartphones unless their current ones are broken.

Mr Bryan Ma, vice-president of devices research at IDC says: "With consumers unsure of where their next paycheck is coming from, some would try to stretch the life of their existing phones, while others might opt for a cheaper 'good enough' phone".

MID-RANGE PHONES IN FOCUS

An example of a "good enough" phone is the Apple iPhone SE, which was launched in late April at the peak of the pandemic. With a starting price of $649, the iPhone SE is the most affordable iPhone since its predecessor in 2016.

It was also the most widely searched smartphone in Southeast Asia with 673,000 searches between March and April on price comparison website iPrice.

The iPhone SE, as well as other more affordable smartphones, were also on the radar of Singapore users of the iPrice platform.

The website says there was a 178 per cent increase in searches by Singapore users for entry-level and mid-range models in April compared to March. In comparison, premium smartphones saw a 44 per cent increase in search activity in the same period.

"We believe that Singaporeans were searching high and low for mid-range smartphones during the circuit breaker period," says iPrice.

According to IDC, while the top three smartphone makers by market share - Samsung, Huawei and Apple - saw sales dip in the first quarter of the year, fourth- and fifth-placed Xiaomi and Vivo experienced gains of 6.1 per cent and 7 per cent respectively, boosted mainly by sales of affordable smartphones in India.

Mr Juha Winter, associate director at market research firm Strategy Analytics says that consumers want "value-for-money devices with good-enough specs at affordable prices", especially with mobile operators reducing handset subsidies in recent years and countries entering recession due to the Covid-19 outbreak.

He adds that only one flagship model - the Samsung Galaxy S20+ in third spot - was in Strategy Analytics' list of the top-six bestselling Android smartphones in the first quarter of the year. Samsung's mid-range Galaxy A51 ($448) was the most popular smartphone.

Ms Lee Kay Ling, 27, who works in digital advertising, bought an Oppo Reno3 Pro smartphone for $749 last weekend. She says: "A new flagship phone will easily set you back by $1,500 or more. I don't think the extra features justify the price when phones that cost half as much can do the job just as well."

The gap between mid-range and flagship smartphones has narrowed in recent years. Mid-range smartphones, which usually range between $300 and $800, now often come with features typically found in the top phones, such as multiple rear cameras, Oled screens and in-display fingerprint sensors.

"Samsung and Chinese smartphone makers have been aggressive in penetrating the latest technologies to mid-range and even lower-tier smartphones," says Ms Flora Tang, research analyst at market research firm Counterpoint Research.

Even 5G connectivity, which is currently found only in flagship smartphones, is expected to appear in mid-range models by the end of the year, says Mr Ma.

But while the hardware of mid-range smartphones have become more competitive with that of high-end models, top phones are still king when it comes to camera performance, which increasingly relies on software to make a difference.

Operations manager Kwang Xuan Qing, who bought the flagship iPhone 11 Pro Max earlier this year, says: "My biggest consideration for a smartphone is the camera. And the ones in mid-range phones just do not cut it for me."

Users like Mr Kwang are unlikely to shift to a mid-range model, say analysts.

Mr Jin Shengtao, research analyst at market research firm Canalys says: "Singaporeans would rather hold onto their existing smartphones longer as it tends to be painful to downgrade to a less premium brand or model."

Echoing this sentiment is Ms Sahiba Puri, senior analyst at market research firm Euromonitor International: "While purchasing may be stalled for a while, demand for premium phones is expected to resurface as the economy reopens."

She expects the smartphone market in Singapore to shrink by 3 per cent to 2.7 million units compared to the previous year due to supply constraints and retail shutdowns as a result of the Covid-19 outbreak.

ONLINE RETAIL RISING

The nationwide lockdowns are also pushing the smartphone market to shift sales from brick-and-mortar stores to online platforms.

According to the Singapore Department of Statistics, online retail made up 70.6 per cent of all sales for computer and telecommunications equipment in April, up from 41.2 per cent in March. Singapore implemented its circuit breaker measures, which closed non-essential businesses, on April 7.

Counterpoint Research analyst Sujeong Lim says that first-time online shoppers may continue using online retail platforms in the future after seeing the benefits - prices are lower and it is less time-consuming to buy online.

Another knock-on effect of Covid-19 is the conversion of smartphone holdouts to smartphone users.

Those still using feature phones may be convinced to switch after seeing the need for smartphones during a lockdown to access essential services such as food and grocery deliveries, says Mr Varun Mishra, research analyst at Counterpoint.

However, the increase in employees working from home may lead to consumers in general buying fewer mobile devices, as they prioritise devices such as computers and monitors over smartphones, say analysts. "After all, if one is already at home, then one would likely use a PC anyway," says Mr Ma.

This trend, says Mr Ryan Reith, program vice-president at IDC, will result in smartphone makers pricing their upcoming 5G models even more aggressively than expected prior to the pandemic.

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Rise of mid-range smartphones amid Covid-19 lockdowns, worsening economic outlook

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The half-time report for the smartphone industry makes for grim reading. Market research firm IDC said last week that global smartphone shipments will drop by 18.2 per cent in the first half of this year.

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1. https://www.statista.com/statistics/1202705/singapore-consumer-spending/ [Part B(1)]
2. https://www.singstat.gov.sg/-/media/files/publications/households/pp-s27.pdf [Part B(1)]
3. https://www.theverge.com/2019/3/18/18263584/why-phones-are-so-expensive-price-apple-samsung-google
[Part B (2)]
4. https://www.phonearena.com/news/have-we-reached-the-end-of-smartphone-price-inflation_id118210
[Part B (2)]
5. https://www.imda.gov.sg/for-community
[Part B (2)]

6. https://www.gsma.com/mobileeconomy/wp-content/uploads/2020/06/GSMA_MobileEconomy_2020_AsiaPacific.pdf
[Part B (2)]
7. https://www.statista.com/statistics/1106103/forecast-of-annual-change-in-global-smartphone-shipments-impacted-by-covid-19/

[Part B (3)]

8. https://www.mas.gov.sg/-/media/MAS/Monetary-Policy-and-Economics/Education-and-Research/Research/Economics-Essays/2018-Oct/SF-B-The-Impact-of-Technological-Progress-on-Inflation.pdf
[Part C]
9. https://www.mci.gov.sg/en/portfolios/digital-readiness/digital-readiness-blueprint [Part D]
10.  https://www.smartnation.gov.sg/about-smart-nation/pillars-of-smart-nation [Part D]
11. https://www.economicscafe.com.sg/2010-essay-question-5/ [Part A]
12. https://www.exportgenius.in/blog/singapore-mobile-phone-exports-singapore-export-data-market-view-484.php [Part C]
13. https://www.lifewire.com/where-is-the-iphone-made-1999503 [Part C]
14. https://www.straitstimes.com/business/economy/singapores-factory-future-taking-manufacturing-to-new-highs [Part C]
15. https://www.statista.com/statistics/814518/market-share-mobile-vendors-singapore/ [Part C]
16. https://www.warc.com/newsandopinion/news/singapore-shoppers-drive-growth-of-app-economy/en-gb/43904
[Part C]

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c) Smartphone Industry's Contribution to the General Singapore's Economy

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c) Smartphone Industry's Contribution to the General Singapore's Economy

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Competition for Market Share

With a mobile penetration rate of 159.1%, Singapore is the perfect market for ambitious smartphone vendors. In 2020, the top three smartphone brands that have a substantial market share in the Singapore market are:

1.  Apple (33.6%)
2. Samsung (29.18%)
3. Huawei (14.73%).

Market share is an indicator of a company’s competitiveness and when a company increases its market share, it improves its profitability. This will help to contribute to the economy as competition usually brings about:
- lower prices
- better quality of goods and services
- greater variety
- increased innovation.

Without competition, dominant firms can use their market power to:
- charge higher prices
- offer decreased quality
- block potential competitors from entering the market

This then decreases the level of entrepreneurship in the country.

Creates Employment Opportunities

The smartphone industry can contribute to the economy by providing jobs in the domestic manufacturing industry. According to an article done by Lifewire, Singapore manufactures and supplies some key iPhone components such as
- glass screens
- A-series processor
- touch-screen controller
-semi-conductors

Moreover, Apple maintains two companies to send these manufactured parts to be assembled into mobile phones. Those are companies are Foxconn and Petragon, which are both based in Taiwan. In Singapore, we are one of the many locations that Foxconn has chosen to maintain its factories at. Therefore, it can be seen that the smartphone industry is able to create jobs in the manufacturing industry which will ultimately contribute to Singapore's GDP.

Boost Exports

From 2010 to 2019, the value of Singapore mobile phone exports has grown from USD$6,917 million to USD$11,444 million which is an increase of 84.7%. This contributes to the economy as the level of output from the industrial facilities is constantly increasing and an employment rate will also grow in tandem in order to keep these factories in operation.

Impact of the Smartphone industry to Singapore's Inflation

Since the rise of the smartphone industry, it has contributed to the inflation of Singapore's economy, this is happens in 2 ways, via the Direct and Indirect channel.

Direct Impact on Inflation
- Smartphones encompasses the functions and features of other devices (camera, television, mp3 players, etc.)
- Consumers therefore need not purchase these goods, thereby reducing the demand for them and cause a downward bias on price for these products that are replaced
- Thereby lowering aggregate inflation.

Indirect Impact on Inflation
- Increased smartphone usage exposes consumers to a plethora of online platforms that can alter consumers spending habits.
-  Platforms such as online stores will enable consumers a lower cost of gathering information and a larger selection of prices for goods and services
- Enabling consumers to easily compare prices and quality between sellers, lowering the sellers' power in the market which prevents price inflation on items with similar products and quality.

The rise in the smartphone industry thus increases competition in the market for various goods and services as it allows consumers a better way to compare prices and lower the power of sellers, thereby allowing a fairer, lower pricing which will indirectly lower inflation in Singapore

Facilitates the rise of the Digital Economy
The competition in the smartphone industry have led to greater advancements in the capabilities of smartphones which have helped to facilitate the rise of the internet economy. According to a report Google, Temasek and Bain & Company, the digital economy is also set to add US$10 billion to Singapore’s gross domestic product (GDP) by 2021. Moreover, the Singapore internet economy was worth $12 Billion in 2019 and it is projected to increase by $15 Billion to $27 Billion in 2025. This is mainly caused by the pandemic as city lockdowns, quarantines, and work from home stipulations have taken virtual events, online shopping, food delivery services, and digital banking to another level.

According to a report done by WARC, one-third of Singaporeans have increased their app usage during Circuit Breaker. The following data shows a much greater breakdown of the app usage amongst Singaporeans:

56% of consumers increased their time on social networking apps, followed by food delivery at 51% and video conferencing at 42%.

42% used food delivery apps multiple times a week, 38% for retail shopping and 35% for grocery/alcohol delivery.

25% used educational apps for adults multiple times a week, signalling a desire for users to upskill themselves during this time.

While working from home, most Singapore shoppers used utility apps multiple times a week, 37% downloaded home exercise apps, 35% video conferencing apps and 33% finance apps.

Therefore, with the advancements of the capabilities of smartphones as well as greater adoption of it, will help to drive up the revenue of other industries that requires consumers to use a smartphone which would impact the overall Singapore economy as a whole.

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b) Economic Impact of Singapore's Economy on the Smartphone Industry

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b) Economic Impact of Singapore's Economy on the Smartphone Industry

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(1)How Singapore's GDP affected the Smartphone Industry.

In 2020, Singapore's GDP shrank 5.8%, which is the worst contraction since 1965.  This has thus resulted in uncertainties in consumer's buying confidence as consumers have to be more cautious with regards to their spending on essentials and luxury items.

Due to the biggest contraction of the GDP in 2020:

- The recession has led many consumers to worry about their jobs and income. This has resulted in the overall consumer spending to drop in 2020 Q4 to 39.74 billion SGD from 2019 Q4’s 44.8 billion SGD.

- Median household income has dropped from $9,425 in 2019 to $9,189 in 2020. during this uncertain time, disposable income (due to the recession and negative GDP in 2020) of people has declined and hence consumers are wary of their spending

- This has translated into the Smartphone industry, as consumers will be worried about their spending and will thus hold off the buying of new phones, or at the very least opt for phones brands that are inferior goods compared to more “luxurious” normal good brands such as Apple and Samsung that are more costly.

This is supported by the 178% increase in searches among Singaporean consumers for entry-level and mid-level phones in April 2020 compared to the month before, whereas premium smartphone searches only increased 44%

The top three smartphone makers by market share - Samsung, Huawei and Apple (which are considered normal, costlier goods) - saw sales dip in Q1 of 2020, while the fourth and fifth-placed Xiaomi and Vivo (considered inferior goods and relatively cheaper) experienced gains of 6.1 per cent and 7 per cent respectively

Thus, this shows the increased interest by Singaporean consumers for cheaper phones attributed to the decrease in Singapore’s GDP.

Furthermore, Globally

Market research firms Euromonitor and IDC stated that:

Global smartphone shipments will drop by 18.2 per cent in the first half of 2020.

Smartphone sales declined by 11.7 per cent, to 275.8 million units, in the first three months of 2020 compared with the same period the previous year, which is the industry's biggest year-on-year quarterly fall.

Smartphone market in Singapore will shrink by 3% to 2.7 million units compared to the previous year.

This therefore indicates that the global effects (encompasses Singapore) for the Smartphone industry is generally negative due to the global Covid-19 pandemic affecting economies all over the world and in Singapore, thereby affecting buyers confidence and spending, leading to less Smartphone sales.

In conclusion, due to the GDP contraction and recession in 2020, consumers were more price conscious and frugal. New buyers who are more wary of their spending are purchasing phones from cheaper brands as compared to costlier brands, and the costlier brands in the Smartphone industry in Singapore has also seen a drop in the sales of smartphones due to the drop in GDP and median household incomes as consumers hold on to their current phones instead of buying the newest models, or buying models from cheaper affordable brands.

(2) General Price Trend (Inflation topic) in the Singapore Smartphone Industry

Phones are increasingly getting more expensive globally and in Singapore. For example, an iPhone 13 (flagship) can cost up to SGD $2,479 in 2021 whereas in 2017, the iPhone 10 (flagship) only costed up to SGD $1,888. The price increases are mainly attributed to these areas in our Economy:

Decline in Smartphone Sales

- More people own phones today and are continuously holding on to their devices longer as the quality of phones are increasingly durable and still contain relevant features.

- Leading to smartphone companies to increase the price of newer models to prevent a drop in their revenue and to make for the drop of sales

- Affecting smartphone prices in Singapore as the price changes have to be kept constant throughout the world.

Phones are more expensive to make.

- As the smartphone market gets more saturated, smartphone brands have to add more features to stand out from the competition

- Features such as wireless charging, more storage, multiple cameras and 5G usability make the cost of production of phones higher, and thus a more expensive phone base price.

- For example 5G features can add up to $200 to the cost of a phone. Thereby making the base price of phones to increase.

Increase in Smartphone prices overlooked by consumers

- In Singapore, they was a 88% mobile subscriber penetration in 2019(i,e Singtel,M1,etc) with a estimated increase to 90% in 2025

- Therefore, a majority of smartphone users have access to  different payment plans for smart phones such as a lump sum payment or a contract deal done over a year or more.

- Price increases to a phone will therefore be spread out over the length of the term which results in consumers overlooking the increase, and paying more.

For example, a $200 dollar increase is only $8 per month over 2 years. Thereby leading to consumers overlooking the price increase, and paying a higher price for phones leading to an increased inflated price.

Phones are a necessity in Singapore

- As the Singaporean Government is promoting digitalization through SG Smart Nation for a variety of reasons (efficiency,  environmentalism and etc.) more and more things are being done digitally

- Such examples of functions now being done digitally are filling taxes, applying for sole-proprietorships, applying for grants and relief, health appointments and etc.

- This would naturally mean that Singaporeans would have to use more digital items that will enable them to live work and play in this digitalized economy such as a Smartphone.

- This thus makes Smartphones a inelastic demand as users require them and regard them as a necessity and are thus vulnerable to price increases from Smartphone brands over time.

3) Unemployment Rate Of Singapore and how it affects the Smartphone industry

In 2020, the overall unemployment rate of Singapore was raised to 3.0 percent in 2020 from 2.3 percent in the year before. This will therefore result in more consumers being jobless leading to lower consumer spending.

This has thus affected the Smartphone Industry in Singapore causing a:

Drop in demand for Smartphones due to

An increase in unemployment that will result in more consumers being jobless and lacking a source of income.

For example, as stated above, the median household income from work dropped from $9,425 in 2019 to $9,189 in 2020

This results in a drop of disposable income and hence, more frugal spending

Therefore consumers will spend less money on big ticket items such as smartphones, opting to purchase cheaper brands, buying lesser phones overall, or not purchasing a phone at all and opt to using their current models

This causes the overall demand for smartphones to drop and thus, result in a drop in sales of the Smartphone Industry and a drop in demand for Smartphones

Also, unemployment in 2020 is mainly attributed to the Covid-19 pandemic, which is also a factor that affects the Smartphone industry.

In 2020, there was a negative growth in the smartphone shipment worldwide in Q4 of -2.3%

Smartphone market in Singapore will shrink by 3% to 2.7 million units compared to the previous year due to supply constraints and physical retail store shutdowns attributed to Covid-19.

For example, Samsung had its shipments dropping to their lowest level since the second quarter of 2012. (Statista)

This drop in supply is mainly due to the resource shortages, factory shutdowns, quarantine mandates, logistics, and travel restrictions causing bottlenecks in the production and roll out of new devices for smartphone vendors.

The increased unemployment due to Covid-19 and the recession (drop in GDP) would therefore lead to a decrease in Smartphone demand and sales

This would also increase the unemployment rate as there is a lack of demand for smartphones, causing job redundancies in the smartphone industry and other industries related to it, causing unemployment across the supply chain globally and in Singapore.

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Eligible seniors may enjoy the following subsidised product and service:

2-years mobile plan, at $5.00 per month

Smartphone, starting from $20.00 (1-time cost).

The subsidised plan will come with:

Free SIM card registration;

Free caller ID;

Unlimited incoming local calls;

Continued mobile data connectivity, with no excess data charges; and

Other value-added services.

Details of Mobile Access Plan Options:
(Effective Date: 1 October 2021)

All prices are inclusive of GST.

Redemption is subject to terms and conditions of the scheme and participating telcos.
The choice of smartphone is subject to stock availability at the time of redemption.
Unlimited mobile to mobile calls, and unlimited SMS to TPG numbers.

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Mobile Access for Seniors - Infocomm Media Development Authority

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Eligible seniors may enjoy the following subsidised product and service: 2-years mobile plan, at $5.00 per month Smartphone, starting from $20.00 (1-time cost). The subsidised plan will come with: Free SIM card registration; Free caller ID; Unlimited incoming local calls; Continued mobile data connectivity, with no excess data charges; and Other value-added services.

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Mobile Access for Seniors
As part of the Seniors Go Digital programme launched by the Infocomm Media Development Authority (IMDA). The purpose is to encourage digital adoption among seniors as well as providing financial assistance to lower-income seniors who want to go digital but do not have the financial capability to do so.  Under the Mobile Accesss for Seniors scheme, seniors who qualify will be able to receive a 2-year mobile plan, at $5.00 per month and a smartphone, starting from $20.00 (1-time cost). Moreover, the subsidised plan will come with (1)Free SIM card registration, (2)Free caller ID, (3)Unlimited incoming local calls, (4)Continued mobile data connectivity with no excess data charges and (5)Other value-add services such as mobile security.  Through this scheme, it will drive up the demand for mobile phones as the introduction of this scheme will make it more affordable to lower-income seniors and it takes much less proportion of their income. This scheme will also lead to an increase in the number of buyers which will support the smartphone industry.

Smart Nation
Smart Nation Singapore is a government initiative with the aim of increasing total factor productivity, improving the lives of Singaporeans, retaining local talent and attracting talent. The initiatives are based off three key pillars:
1. Digital Economy
2. Digital Government
3. Digital Society

The pillar that will support the smartphone industry will be the pillar of "Digital Society". Under this pillar, the digital readiness blueprint outlines the strategic thrusts in order to accomplish the goals of this initiative:
1. Expand and Enhance Digital Access for Inclusivity
The first strategic thrust will comprise making smartphones more accessible by offering phones at subsidised rates to lower-income households.
2. Infuse Digital Literacy into National Consciousness
The goal of this strategic thrust is to improve the digital literacy of Singaporeans and teaching Singaporeans how to utilise technology so as to effectively connect with the world. Under the Basic Digital Skills Curriculum, it teaches Singaporeans how to access government digital services, online shopping, e-payment, internet surfing and identify online scams on their mobile devices.

As a result of this initiative, more Singaporeans will be more aware of the necessity of smartphones as well as how to utilise them in their everyday life. This will positively impact the smartphone industry as it increases the number of potential customers and smartphones will gradually become a necessity rather than a luxury product.

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Price Elasticity: Apple IPhone (improvement)

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Price Elasticity: Apple IPhone (improvement)

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In general, the smartphone industry is relatively elastic in nature and this means that consumers will be more susceptible towards the movement in price of smartphones.

Originally, smartphones were considered to be a luxury good as it has a low degree of necessity and is non-essential, therefore making the demand price elastic.

However, with rapid technological advancements as of today, smartphones have a higher degree of necessity as it is viewed as a basic necessity to improve the quality of our lives.

However, larger firms like Apple have the financial capability to engage in non pricing strategies for product differentiation, hence effectively increasing consumers’ loyalty to the brand. Furthermore, if consumers want an iOS smartphone, they only have one option.

Thus, if the price for an iPhone increases, or remains higher than other smartphones, there will be a less than proportionate decrease in the quantity demanded as consumers greatly value the product and would not mind paying a higher price for it. This means that the demand would not be greatly affected even if Apple decides to increase the price of the iPhone.

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Glow Points:
1. Great choice of industry for your analysis in the context of Singapore.

2. The articles researched for your analysis were relevant, current, and factual. I enjoyed reading them.

3. Good flow of thoughts in describing the industry, the market structure, key determinants of demand and supply, and elasticity of demand.

4. The determinants of demand and supply, particularly the increase of cost production arising from the shortage of microchips in smartphones were highlighted and explained well. Also, taste and preference as one of the determinants of demand against the backdrop of what specific features and functionality Singaporeans generally look for when purchasing a smartphone were well explained.

5. From your reflections, I am glad to see that you could get along well and get the job done.

Some Areas for Improvement:
1. Characteristics of Market Structure
There is a high level of entry barrier in terms of getting a license from the government to operate and the operation cost and entrenched market leadership by iPhone and Samsung and a saturated market may pose challenges for new entrants into Singapore's market.

2. The price elasticity of demand may vary from one brand to another. In a culture, where people are used to purchasing new releases of Smartphones, it is reasonable to conclude that in general, the demand for Smartphones tends to be more price inelastic, particularly for iPhones.

3. Take note of some suggestions that were made to improve the productivity of the group for the next stage.

What is Next?

Overall, the group has done a great job in analyzing the smartphone industry in Singapore with relevant statistics and information.

There is no need to update your stage 1 Padlet wall with my comments. But keep them in mind when you consolidate key points for your final PowerPoint presentation.

Next week, I will brief the class on Stage 2 - macroeconomics analysis.

Cheers!

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Change in Tastes and Preferences [Demand Determinant]

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Change in Tastes and Preferences [Demand Determinant]

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The taste and preference of consumers and the popularity of a good/service affects the demand of a particular good.

In a study conducted, the various factors affecting taste and preferences are:

The Country of Origin (COO).

The COO of a smartphone company affects the preferences of consumers as certain consumers prefer a certain country. In a study conducted in Singapore in 2017, the top 3 countries consumers preferred were

1. Korea

2. USA

3. Japan

The brand of the Smartphone Company.

According to the study, Samsung, Apple and Nokia were the top rated ones respectively. Furthermore, these companies got a relatively high proportion of an "Unsure" rating –  Apple (54%), Samsung (39%) and Nokia (11%). This suggests that users of these brands continue to use their products due to the branding of the smartphone company, and their loyalty to it.

Features of the phone

According to the study, when it comes to purchasing a phone, Singaporeans find that the top three most important features are:
i. Battery Life
ii. Durability
iii. Internal Storage

In the 4th position is warranty followed by camera quality and price which came in 5th. This suggests the preferences in the specifications of a mobile phone that Singaporeans are more likely to consider before purchasing a phone.

Reference: https://www.researchgate.net/publication/331477630_Consumer_Choice_Criteria_for_Smart_Phones_in_Singapore

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1. https://www.statista.com/statistics/1266889/singapore-smartphone-usage-by-age-group/  [Number of Buyers]
2. https://www.straitstimes.com/tech/tech-news/worldwide-smartphone-shipments-fell-in-third-quarter-of-2021-amid-chip-shortage [Change in the prices of resources: Chips]
3. https://www.researchgate.net/publication/331477630_Consumer_Choice_Criteria_for_Smart_Phones_in_Singapore [Changes in Taste and Preferences]

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Price elasticity of demand is a measure of how sensitive consumers are to a change in price. If consumers are responsive to price changes, the product is elastic. Conversely, if they are unaffected, the product is said to be inelastic.

In general, the smartphone industry is relatively elastic in nature

Evidence:
Proportion of Income
Due to COVID-19 pandemic, it has many countries to impose lockdowns, causing rising unemployment and worsening economic outlook. Additionally, it has caused major uncertainty among many Singaporeans and they are wondering when their next pay will be coming in. This forces many Singaporeans to search for phones that are affordable. During the circuit breaker period, there was a 178 per cent increase in searches by Singapore users for entry-level and mid-range models in April compared to March. In comparison, premium smartphones saw a 44 per cent increase in search activity in the same period.

Availability of Substitutes
There are many substitutes for these people to choose from instead of purchasing a high-end phone. For instance, in the article, the best selling Samsung Phone is the mid-range Samsung Galaxy A51 while their flagship model, Samsung Galaxy S20+, was the third best selling phone.

Therefore, it is evident that the price elasticity of smartphones is elastic as the drop in income has forced a response in people to choose a more affordable option. Moreover, there is a variety of other cheaper options for people to choose from.

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Market Structure of the Smartphone Industry: Oligopoly

Oligopoly is a market structure that occurs when an industry has a few firms dominating the market, with each firm holding a significant portion of the market share.

The few large firms controlling significant portions of the Smartphone industry are Apple's iPhone(33.6%), Samsung(29.18%) and Huawei(14.73%).

In Singapore, there is a mobile penetration rate of 158.7%

Generally, all these different smartphone brands offer (in principle) the same product, which is a mobile device that is capable of making calls, texts, taking pictures and browsing the internet.

Therefore, Product differentiation exists. One of the few ways they compete and differentiate themselves from the competition is by having a unique and heavily differentiated product image:

The look, branding, shape and size of a phone.

Different technology (e.g. Samsung’s folding flip phone,  Apple's iPhone Camera technology, iOS and Android systems, 5G Capability)

Different mobile operating systems (Android vs Apple)

The Smartphone market is highly capital intensive, requiring firms to heavily invest in advertising, IP for technology, and etc. This results in a naturally occurring high level of entry, where firms that entered the market first can operate efficiently and enjoy the benefits of economies of scale.

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This refers to the change in the population of buyers in the market. The population structure also plays an important role in affecting the demand for smartphones.

Evidence:
According to the statistics, the number of Smartphone users in Singapore in 2020 was 5.17 million and it is predicted to increase to 5.68 million in 2025.

This would mean that there will be a rise in demand in smartphones as more Singaporeans are expected to become smartphone owners.

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Demand Determinant- Money Income

Smartphones are becoming cheaper and better. There are many high end phones available out there and people, who generate high income, will be more inclined to purchase such phones.

Moreover, there are also many low to medium end options to choose from which are relatively affordable and this will help to increase the demand of such phones for people who generate low to medium income. In Singapore,

Increase in the level of income of consumers can lead to either an increase or decrease in the demand for a good, ceteris paribus. However, this depends on the nature of good, whether it's normal or inferior. Smartphones are normal goods, whose demand rises when the income of consumers rises.

Evidence:

The income of households in Singapore has decreased in 2020 but there has been a cumulative change (increase) from 2015 to 2020. The median household income as of 2020 is $9,189, which is lower than $9293 in 2018 and$9,425 in 2019.

Although there has been a decrease in income, it is not a low income per household. This means that Singaporeans would still be willing and able to purchase smartphones. However, the type of smartphones they purchase would not be the higher end products.

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Change in the price of resources: Chips [Supply Determinant]

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Change in the price of resources: Chips [Supply Determinant]

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This refers to the change of resources used to produce a good. In this context, the rising prices of chips may cause the prices of phones to increase.

Evidence:

The cause of these rise in prices is because of the higher material and logistics cost and the race by device makers to secure adequate chip supplies since the shortage of chips that began last year.

Chip developers are paying 40% higher production fees for legacy chips that are in the shortest supply, some areas even reaching up to 500% in serious cases.

For example, the price of microcontroller chips jumped from $0.20 each to more than $1, showing a 400% increase in less than a year.

Prices are predicted to go even higher the following year because of the heavy chip demand.

Peter Hanbury, a partner specialising in chip and tech supply chain at Bain & Co., commented that the price of chips will continue to rise into next year due to the time taken to expand the production capacity.

He added that chip developers such as Qualcomm, NXP and Nvidia will negotiate to pass these increased princes onto their customers such as Apple, Samsung, Xiaomi, etc. Due to this, the increase in the retail prices of smartphones will become noticeable in the near future.

Gai, of Counterpoint Research, has commented that increasing cost of chips will become may impact smartphone makers' business strategies.

He mentioned that the net profit margin for smartphone makers excluding Apple is only about 5% to 10%. In that case, the rising chip costs will definitely push all the industry players to roll out higher-end handset models for next year to offset the cost impacts rather than focus on midrange or lower-end phones.

Therefore, the price of these chips will prompt companies to increase the supply of high-end phones in order to offset the increased cost of chips. At the same time, it will decrease the supply of medium to low end phones as smartphone companies are less willing to produce such phone as they are unable to offset the increased price of the chips

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Our group has been really understanding and cooperative while working together. My group members are helpful, mindful and supportive of others' opinions. We all have different ideas and various perspectives we provide us with a lot of ideas when brainstorming for ideas for the project.

One improvement for the team would be to plan our project in a better way before starting on it. Although we are quite effective, our efficiency can be improved if everyone planned on how we are going to do our project and start with the finish in mind. This is so that we know what to expect when we finish our part. This will also enable us to work more smoothly, without any hesitation and give our best.

One interesting fact learnt is that more senior citizens are starting to use smartphones mainly due to Covid-19. This is pretty unexpected as many elderly are not very tech-savvy so I assumed that they would not be interested in smartphones. However, it is good to know that the elderly are up to date and find smartphones entertaining, during such times. Prior to Covid, most elderly have fun talking to their peers at the void deck and senior citizen corner and engage in a lot of outdoor activities. With smartphones, they are still able to connect with each other and bond in a much safer way.

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Everyone is punctual for meetings, getting things done pretty quickly and effectively. It's also nice that our group constantly helps each other with areas of difficulty, always making sure that someone has something to do.

An area for improvement would be let's try to be more energetic and have fun! Maybe we can try to prepare things earlier so we can be more efficient and not just leave things till the last minute.

One thing I learned is that there was a global chip shortage occurring at the moment, leading to phone prices skyrocketing. Although it's not a big issue for smartphones, the replacement of the chips in these smartphones are hard to come by. Now I know why phones are that expensive with everyone trying to get access to more chips which are on a shortage.

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Our group as a whole works very well and efficiently together, we managed to complete majority of the work within a short time period.

I like how we can discuss things easily as a team and not worry about asking stupid questions or being embarrassed. This promotes a healthy environment for group projects which will enable us to get the best standards/quality that we are capable of.

Although everything is good so far, we should start projects earlier so we can better refine our answers and ask for help if needed.

Doing the Market Structure, I found the changes of the market share of each brands in the Smartphone business interesting. For example, Huawei managed to climb to the 3rd spot in 2020, whilst Apple and Samsung were consistently the top 2 companies. It never occurred to me that only 3 companies held a major portion of the business as I am not brand conscious, and only opt to use the $0 phones that Singtel offers at the end of every cycle. It got me interested about the actual way these brands are being perceived, and I cant wait to see if any other brands in the future can break this trend!

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1. This is the first time all of us have worked together under the same team and I am proud to say that we have a strong team dynamic where everyone is cooperative and enthusiastic. Everyone takes initiative and is open to every member's opinions, and offer input where appropriate. I feel like all of us are active contributors and are always punctual for meetings.

2. I think we started slightly later due to other deadlines so I think that for the next submission for economics, we can start earlier and try to clarify doubts with our tutor way ahead of time. We should have decided on the industry earlier so that we would have more time for consultations and discussion.

3. As I did price elasticity, it was a rather new concept for me as I had only just completed the lecture on Elasticity. I learnt that while smartphones have evolved dramatically the past decade, large firms like Apple are still able to price their phones at a high price while still maintaining the demand for their phones.

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One compliment that I have is that everyone is actively contributing and brainstorming ideas that are brilliant while realistic. In this group, everyone here is comfortable with sharing their opinions and I feel that there is not much groupthink going on here as everyone here is encouraged to present any alternatives that they think is good. Additionally, I am relieved that everyone is going the extra mile to give the best answers and that we are driven by a common goal of achieving excellence in this project.

One thing that I feel that the team can improve on is to come better prepared for the meeting as some of them are not aware of the situation and this may hamper the group's efforts. Therefore, one area where my group can improve on is to come prepared and understand the situation before coming to the meeting so that they know the context and understand what the others are saying without getting lost.

One thing that I found interesting was the relatively huge number of phone brands that exist today and there are so many brands that I have never heard of which aroused my curiosity to see what phones they offer.

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The half-time report for the smartphone industry makes for grim reading.

Market research firm IDC said last week that global smartphone shipments will drop by 18.2 per cent in the first half of this year.

This forecast comes on the heels of another grim set of stats from IDC - smartphone sales declined by 11.7 per cent, to 275.8 million units, in the first three months of this year compared with the same period last year. This is the industry's biggest year-on-year quarterly fall.

IDC predicts smartphone sales for the whole of this year will slump by 11.9 per cent from last year.

With the world in the throes of the Covid-19 pandemic, which has caused countries to impose lockdowns, leading to rising unemployment and a worsening economic outlook, many consumers are not buying new smartphones unless their current ones are broken.

Mr Bryan Ma, vice-president of devices research at IDC says: "With consumers unsure of where their next paycheck is coming from, some would try to stretch the life of their existing phones, while others might opt for a cheaper 'good enough' phone".

MID-RANGE PHONES IN FOCUS

An example of a "good enough" phone is the Apple iPhone SE, which was launched in late April at the peak of the pandemic. With a starting price of $649, the iPhone SE is the most affordable iPhone since its predecessor in 2016.

It was also the most widely searched smartphone in Southeast Asia with 673,000 searches between March and April on price comparison website iPrice.

The iPhone SE, as well as other more affordable smartphones, were also on the radar of Singapore users of the iPrice platform.

The website says there was a 178 per cent increase in searches by Singapore users for entry-level and mid-range models in April compared to March. In comparison, premium smartphones saw a 44 per cent increase in search activity in the same period.

"We believe that Singaporeans were searching high and low for mid-range smartphones during the circuit breaker period," says iPrice.

According to IDC, while the top three smartphone makers by market share - Samsung, Huawei and Apple - saw sales dip in the first quarter of the year, fourth- and fifth-placed Xiaomi and Vivo experienced gains of 6.1 per cent and 7 per cent respectively, boosted mainly by sales of affordable smartphones in India.

Mr Juha Winter, associate director at market research firm Strategy Analytics says that consumers want "value-for-money devices with good-enough specs at affordable prices", especially with mobile operators reducing handset subsidies in recent years and countries entering recession due to the Covid-19 outbreak.

He adds that only one flagship model - the Samsung Galaxy S20+ in third spot - was in Strategy Analytics' list of the top-six bestselling Android smartphones in the first quarter of the year. Samsung's mid-range Galaxy A51 ($448) was the most popular smartphone.

Ms Lee Kay Ling, 27, who works in digital advertising, bought an Oppo Reno3 Pro smartphone for $749 last weekend. She says: "A new flagship phone will easily set you back by $1,500 or more. I don't think the extra features justify the price when phones that cost half as much can do the job just as well."

The gap between mid-range and flagship smartphones has narrowed in recent years. Mid-range smartphones, which usually range between $300 and $800, now often come with features typically found in the top phones, such as multiple rear cameras, Oled screens and in-display fingerprint sensors.

"Samsung and Chinese smartphone makers have been aggressive in penetrating the latest technologies to mid-range and even lower-tier smartphones," says Ms Flora Tang, research analyst at market research firm Counterpoint Research.

Even 5G connectivity, which is currently found only in flagship smartphones, is expected to appear in mid-range models by the end of the year, says Mr Ma.

But while the hardware of mid-range smartphones have become more competitive with that of high-end models, top phones are still king when it comes to camera performance, which increasingly relies on software to make a difference.

Operations manager Kwang Xuan Qing, who bought the flagship iPhone 11 Pro Max earlier this year, says: "My biggest consideration for a smartphone is the camera. And the ones in mid-range phones just do not cut it for me."

Users like Mr Kwang are unlikely to shift to a mid-range model, say analysts.

Mr Jin Shengtao, research analyst at market research firm Canalys says: "Singaporeans would rather hold onto their existing smartphones longer as it tends to be painful to downgrade to a less premium brand or model."

Echoing this sentiment is Ms Sahiba Puri, senior analyst at market research firm Euromonitor International: "While purchasing may be stalled for a while, demand for premium phones is expected to resurface as the economy reopens."

She expects the smartphone market in Singapore to shrink by 3 per cent to 2.7 million units compared to the previous year due to supply constraints and retail shutdowns as a result of the Covid-19 outbreak.

ONLINE RETAIL RISING

The nationwide lockdowns are also pushing the smartphone market to shift sales from brick-and-mortar stores to online platforms.

According to the Singapore Department of Statistics, online retail made up 70.6 per cent of all sales for computer and telecommunications equipment in April, up from 41.2 per cent in March. Singapore implemented its circuit breaker measures, which closed non-essential businesses, on April 7.

Counterpoint Research analyst Sujeong Lim says that first-time online shoppers may continue using online retail platforms in the future after seeing the benefits - prices are lower and it is less time-consuming to buy online.

Another knock-on effect of Covid-19 is the conversion of smartphone holdouts to smartphone users.

Those still using feature phones may be convinced to switch after seeing the need for smartphones during a lockdown to access essential services such as food and grocery deliveries, says Mr Varun Mishra, research analyst at Counterpoint.

However, the increase in employees working from home may lead to consumers in general buying fewer mobile devices, as they prioritise devices such as computers and monitors over smartphones, say analysts. "After all, if one is already at home, then one would likely use a PC anyway," says Mr Ma.

This trend, says Mr Ryan Reith, program vice-president at IDC, will result in smartphone makers pricing their upcoming 5G models even more aggressively than expected prior to the pandemic.

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Rise of mid-range smartphones amid Covid-19 lockdowns, worsening economic outlook

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The half-time report for the smartphone industry makes for grim reading. Market research firm IDC said last week that global smartphone shipments will drop by 18.2 per cent in the first half of this year.

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CHENG TING-FANG, Nikkei staff writer

TAIPEI/HSINCHU, Taiwan -- The price of chips -- and the electronic devices they power -- are on track to rise into 2022 as the world's biggest contract chipmaker joins its rivals in ramping up production fees.

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Chip prices set to rise into 2022 as TSMC hikes rates

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CHENG TING-FANG, Nikkei staff writer TAIPEI/HSINCHU, Taiwan -- The price of chips -- and the electronic devices they power -- are on track to rise into 2022 as the world's biggest contract chipmaker joins its rivals in ramping up production fees.

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https://www.singstat.gov.sg/-/media/files/publications/households/pp-s27.pdf

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https://www.statista.com.np.remotexs.co/statistics/494598/smartphone-users-in-singapore/

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In 2020, Apple was the market leader among mobile vendors in Singapore with a market share of approximately 33.6 percent. Previously the leading mobile vendor in 2014, Samsung's market share has decreased by approximately 13 percent.
Mobile vendors in Singapore
As of 2019, there are over eight million mobile subscribers in the country, with a mobile population penetration rate of 158.7 percent. Singaporeans were found to use their mobile phones mainly for online banking and entertainment purposes.
Current developments
Due to the COVID-19 pandemic, the mobile market in Singapore was expected to shrink in the next year. However, entry level and mid-range smartphone models experienced an almost 178 percent boost in searches during this period - especially the iPhone SE and Oppo 3. Huawei, one of the leading mobile vendors in the country, is also catching up to Apple with its latest release, Huawei Nova 7 SE, bringing one of the first 2020 5G-capable mid-range smartphones to Singapore's market.

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Singapore: mobile vendor market share 2020 | Statista

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In 2020, Apple was the market leader among mobile vendors in Singapore with a market share of approximately 33.6 percent. Previously the leading mobile vendor in 2014, Samsung's market share has decreased by approximately 13 percent. Mobile vendors in Singapore As of 2019, there are over eight million mobile subscribers in the country, with a mobile population penetration rate of 158.7 percent.

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Microeconomics Preliminary Analysis [Stage 1]

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Microeconomics Preliminary Analysis [Stage 1]