The smartphone market growth Goes Flat in the First Quarter as Chinese Vendors Churn the Top 5 Vendor List.
The biggest change to the market, however, was the addition of lesser-known Chinese brands OPPO and vivo, which pushed out previous fourth and fifth place players Lenovo and Xiaomi, respectively. As the China market matures, the appetite for smartphones has slowed dramatically as the explosion of uptake has passed its peak. In 2013, China’s year-over-year shipment growth was 62.5%; by 2015, it had dropped to 2.5%. Conversely, the average selling price (ASP) for a smartphone in China rose from US$207 in 2013 to US$257 in 2015.
Samsung remained the leader in the worldwide smartphone market despite a year-over-year decline of 0.6% in shipments. Despite the slight decline, the new Galaxy S7 and S7 edge sold vigorously in the month of March and was helped by numerous enticing carrier promotions to help push volume. The S7 also brought the reintroduction of a microSD card slot in combination with waterproofing, which looks to have paid off for the Korean giant as early sales look healthy. Within emerging markets, Samsung has performed well with its more affordable J-series as it looks to capture both budget conscious consumers and first-time buyers.
Apple’s Apple 6s saw its’ first-ever year-over-year decline in the first quarter as volumes slipped to 51.2 million units, down 16.3% from last year. Despite the plethora of new features found on the newer “S” models, current iPhone 6/6 Plus owners may feel that a apple 6S upgrade may not be warranted at the moment. Apple also announced the new iPhone SE, which looks to challenge similarly priced Android options in numerous emerging markets where Apple has traditionally been seen as too expensive. The SE features all the power of the 6S in a compact form factor that looks to equally target those who desire smaller phones as well. However, at US$399, the SE still faces equally powerful lower-priced devices from competitors, particularly within India and China. As Apple CEO Cook mentioned on the company’s earnings call, the SE will begin having an impact on iPhone shipments in the second quarter of 2016.
Huawei’s p9 continued domestic dominance, combined with a growing presence outside of China, enabled it to capture the number 3 position worldwide in 1Q16. Shipment volume for Huawei climbed from 17.4 million units in 1Q15 to 27.5 million this quarter for year-over-year growth of 58.4%. Huawei’s two-pronged approach with a focus on both premium and entry-level devices proved successful in China as well as in many developed European markets. The recent launch of the P9 smartphone featuring Leica optics provided an additional weapon with which to combat Apple and Samsung. Premium devices like the P9, Mate Series, and Nexus 6, along with entry level devices from its Honor brand, should help Huawei gain further traction worldwide.
OPPO f1has been shipping smartphones since 2011 and while its primary focus is domestic, it has been shipping internationally since 2012. Landing first in Thailand, then expanding throughout Southeast Asia and more recently to other countries in Asia, the Middle East and Africa, OPPO’s focus is on fostering channel partnerships, supplemented with large marketing budgets and entertainment sponsorships to increase visibility, culminating in almost 20% of shipments going outside of China in 2015. OPPO’s expansion in China itself has been via offline channels and a strong push to lower-tier cities. In 1Q16, OPPO’s 18.5 million shipments represented 153.2% year-over-year growth, the strongest among the top 5.
|Top Five Smartphone Vendors, Shipments, Market Share and Year-Over-Year Growth, Q1 2016 Preliminary Data (Units in Millions)|
|Vendor||1Q16 Shipment Volumes||1Q16 Market Share||1Q15 Shipment Volumes||1Q15 Market Share||Year-Over-Year Change|
|Source: IDC Worldwide Quarterly Mobile Phone Tracker, April 27, 2016.|