Despite concerns that the smartphone market was saturated and slowing, 1.47 billion handsets were shipped in 2016, up 2.3% year-on-year.
It was good news for Apple which reclaimed the top spot in Q4, 2016, on the back of strong iPhone 7 and Plus sales which were only launched in September. It was bad news for Samsung which was in number two position following the recall of three million Galaxy Note7s.
Ryan Reith, program vice-president with IDC's Worldwide Quarterly Mobile Device Trackers, said, “2016 was the first down year for iPhone, yet Apple closed in Q4 by surpassing Samsung for the top spot in the smartphone industry. To round it all off, Huawei cracked the double-digit share mark for the first time ever."
Anthony Scarsella, research manager, said, “As Apple and Samsung continue to battle for the top spot, Chinese vendors (Huawei, OPPO, and vivo) have solidified their position as valid contenders thanks to a vast portfolio of affordable, well-built devices.
"Not only is this pressure coming at the low-end, but high-end devices like the P9, Mate 8, R9s/Plus, and XPlay6 haven proven viable options for consumers looking to upgrade or save money without sacrificing quality – they will need to find growth beyond China to eventually knock off either Samsung or Apple at the top."
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Top five smartphone vendors, worldwide shipments, market share, and year-on-year growth, Q4 2016 preliminary data (Units in Millions)
| Vendor | 4Q16 Shipment Volume | 4Q16 Market Share | Year-Over-Year Change |
| 1. Apple | 78.3 | 18.3% | 4.7% |
| 2. Samsung | 77.5 | 18.1% | -5.2% |
| 3. Huawei | 45.4 | 10.6% | 38.6% |
| 4. OPPO | 31.2 | 7.3% | 116.6% |
| 5. vivo | 24.7 | 5.8% | 104.7% |
| Others | 171.4 | 40.0% | -7.3% |
| Total | 428.5 | 100.0% | 6.9% |
Source: IDC Worldwide Quarterly Mobile Phone Tracker, 1 February 2017
Smartphone vendor highlights
Apple reclaimed the top spot in Q4 due to the new iPhone 7 and 7 Plus. Despite this, 2016 marked the first full year of declining shipments for the iPhone with a 7% year-on-year drop to 215.4 million units. Although the iPhone 7 did not feature a drastically different industrial design from its predecessor, it did bring a significantly improved processor, more robust camera, water resistance, and new colour/finish options. Much like Samsung, all eyes will be on Apple's next flagship.
Globally Samsung is number one shipping 311.4 million units, a 3% drop, but vastly exceeding Apple shipments (215.5M) due to a wider range of handsets. Despite the Note7 recall and growing pressure from Chinese vendors, Samsung still managed to find success with its Galaxy S7 and popular J-series. Its new flagship S8 is expected in March. The iPhone 8 is expected in September.
Huawei retained the number three position, shipping 139.4 million units, up 30.2%. The P series and Honor sub-brand drove essential volume in China. Huawei now has its sights set on the US with the recent release of the Mate 9 while Honor brand devices will continue to drive the mid-tier.
OPPO shipped 99.4 million devices, a growth of 132.9% due to great product/price and successful local and international expansion. But it is owned by BBK, as is vivo, and combined BBK handsets shipped 176.7 million, placing it well ahead of Huawei.
vivo remained the number five vendor with 77.3 million units, up 103.2%. Most of the shipments are in China, however, and much like OPPO, vivo has been extremely aggressive with its marketing in a few Asian countries as it looks to extend its global reach.
Comment
The “other category” is interesting and comprised 627.9 million devices – 42.7% of the 2016 market share. There are some very large players there like Lenovo/Moto, Alcatel/TCL, Xiaomi, OnePlus/BBK, ZTE, Nokia (re-entry) and others – any of which could, like OPPO/vivo, gain significant market share if they hit on the right device, right distribution (China and international) and, of course, the right price.
One that I am keeping a close eye on is Lenovo/Moto with its innovative MotoMods – add-ons for smartphones that give it a true camera, sound system, projector etc. I think its Mods concept has legs.
I also think that the phablet category will grow and OPPO, Huawei, Samsung and Lenovo have more room to grow.
Apple continues to do remarkably well for what is essentially a 2+1 model line-up. The iPhone 7/Plus take over from the 6S/Plus and the latter drops a little in price to squueze the last efficiencies out of its manufacturing run and to clear stocks. The SE is still there for those wanting a smaller iPhone.
But there are huge expectations that the 10-year anniversary iPhone 8 (or could be called 10 or X) will be so innovative and different that iPhone users are already saying they are holding off for it – the first three-quarters of 2017 could be a quiet time for iPhone sales.
I think the sleeping giant is the announcement that Qualcomm’s Snapdragon 835 and later will natively run full-fat Windows and Win32 apps. While we are yet to see how good that is in practice it could be the game changer over the next few years as full-fat Windows 10 can run on a smartphone device. If rumours are correct there is a lot of work being done on the mobile ecosystem with docks, docking notebooks/desktops, gigabit wireless and more.
And the rumours of folding OLED smartphones that open to a small tablet may also change the equation. Moore’s Law is in overdrive in mobile devices this year.