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Thursday, April 27, 2017
Samsung And Apple Maintain Top Spots in Smartphone Market


Samsung and Apple maintained their leadership in the smartphone market in early 2017 while Huawei's strong growth cemented its number three position, a market tracker said Thursday.

Research firm IDC said overall smartphone shipments grew 4.3 percent in the first quarter, slightly better than its prior forecast, to 347 million units.

"The first quarter smartphone results further prove that the smartphone industry is not dead and that growth still exists," said Ryan Reith, program vice president with IDC's Worldwide Quarterly Mobile Device Trackers. "There is no question that 2016 was a pivotal year for the industry as growth dipped to low single digits for the first time. However, we believe the industry will show some rebound in 2017, and the strong first quarter results certainly support this argument. In addition to what shipped in 1Q17, big flagship announcements from Huawei with the P10 devices and Samsung with the Galaxy S8 devices show that innovation is still possible. And despite any formal announcements from Apple it is safe to say the industry is highly anticipating what comes from this year's iPhone announcements."

When breaking down precisely where the first quarter growth came from, IDC continues to see the largest catalysts being a handful of Chinese OEMs. The clear leaders are Huawei, OPPO, and vivo, which have all well outpaced market growth for over a year now. And as these companies gain share in new territories the potential to continue this trend is high.

Top Five Smartphone Vendors, Worldwide Shipments, Market Share, and Year-Over-Year Growth, Q1 2017 Preliminary Data (Shipments in Millions)

Vendor

1Q17 Shipment Volume

1Q17 Market Share

1Q16 Shipment Volume

1Q16 Market Share

Year-Over-Year Change

1. Samsung

79.2

22.8%

79.2

23.8%

0.0%

2. Apple

51.6

14.9%

51.2

15.4%

0.8%

3. Huawei

34.2

9.8%

28.1

8.4%

21.7%

4. OPPO

25.6

7.4%

19.7

5.9%

29.8%

5. vivo

18.1

5.2%

14.6

4.4%

23.6%

Others

138.7

39.9%

140.0

42.1%

-1.0%

Total

347.4

100.0%

332.9

100.0%

4.3%

Source: IDC Quarterly Mobile Phone Tracker, April 27, 2017

Samsung regained control as the leader in the worldwide smartphone market despite a flat first quarter (0% year-over-year growth). Substantial discounts on the Galaxy S7 and S7 edge helped move last year's flagships as they make way for the new S8 and S8+. Outside of the high end, the product mix continues to shift toward more affordable models. The J-Series and A-Series drove significant volumes in both emerging and developed markets thanks to flagship-like design at more affordable price points. A refreshed A7, A5, and A3 earlier this quarter, along with a recently updated J-Series, and new flagship S8/S8+ should give Samsung a well-balanced portfolio across all regions in the second quarter. An early positive response to the recently launched S8 and S8+ looks promising as it may have finally put Samsung's Note 7 fiasco to bed.

Apple remained essentially flat with shipments reaching 51.6 million units in the first quarter, up slightly from the 51.2 million shipped last year. The strong holiday fourth quarter carried into the month of January as the larger iPhone 7 Plus returned to stock across most channels in numerous regions. Apple introduced a refreshed iPhone SE with more storage capacity (32GB and 128GB) that puts the mid-tier device in line with the rest of the iPhone portfolio. The Cupertino-based giant also refreshed its flagship smartphone by bringing (Product)Red over to the iPhone which paints both the iPhone 7 and 7 Plus in a new red finish. Finally, rumors of a special edition 10th anniversary iPhone continue to grow as a pending new design, screen size, and performance upgrades all look to be in the works for the fall.

Huawei sustained its dominance in China growing nearly 22% as shipments climbed from 28.1 million units last year, to 34.2 million units in the first quarter of 2017. Huawei once again demonstrated its stable position in the premium market with the P and Mate Series, and a strong presence in the affordable sector with its Y Series and Honor brand. Although Huawei announced earlier in the month that the Mate 9 has sold over 5 million units since it launched in November, here in the U.S. the device, as well as the brand, has failed to grab consumer's attention. This U.S. attention is something they will need if they aspire to displace the two market leaders. The launch of the new P10 flagship and the new P10 Plus at the very end of the quarter presents consumers a valid third option (outside of Apple and Samsung) for the coming quarter thanks to both premium design and similar performance.

OPPO's midrange, camera-focused R9s was a crucial model in China that helped it to see strong shipments in the market. OPPO's growth has in fact been stronger outside of China with nearly a quarter of shipments from international markets. In the rest of Asia and to a smaller degree in the Middle East and Africa regions, its strong retail presence has helped it to grow further in its business. It has been aggressive in both above-the-line and below-the-line activities in India, and stepped up with its after-sales service efforts in several Southeast Asian countries such as Indonesia by increasing its number of service centers.

vivo also relied on a key model with the x9 in China that continued to generate a lot of hype around its selfie camera features, targeted at the under-30 crowd. It stepped up with its marketing efforts in India and was as a sponsor of the Indian Premier League 2017, helping to increase vivo's brand presence in the market, while also increasing the number of exclusive stores in India. In Southeast Asia, it continues to have its own promoters aggressively pushing its phones in the market. In Indonesia, it has also promised consumers single-day phone repairs as a differentiator to the competition.



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