Global shipments of smartphones totalled 347.4m in Q1, 2017, an indefatigable increase of 4.3% year-on-year says IDC.
Q1 is an atypical quarter usually suffering from channel stuffing (overstocking from Q4, 2016), there are few new models launched, and the anticipated Huawei mate 9 and P10, LG G6, and Samsung Galaxy S8/+ will not show up in sales until Q2.
IDC continues to see the largest catalyst being a handful of Chinese OEMs - Huawei, OPPO, and vivo, that have all well-outpaced market growth for over a year now. And as these companies gain share in new territories there is a high potential to continue this trend.
Ryan Reith, program vice president with IDC's Worldwide Quarterly Mobile Device Trackers, said, “The Q1 results further prove that the smartphone industry is not dead and that growth still exists. 2016 was a pivotal year as growth dipped to low single digits, but its rebounding in 2017.”
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Big flagship announcements from Huawei with the Leica dual camera Mate 9 and P10 devices, LG’s new 18:9 G6, and Samsung with the Unboxed 18.5:9 Galaxy S8/+ devices show that innovation is still possible and will ensure stellar sales in Q2.
Anthony Scarsella, research manager with IDC's Worldwide Quarterly Mobile Phone Tracker, said, “Although we have seen an abundance of premium redesigned flagships that just entered the market, moving forward, we still expect most of the growth to come from more affordable models in a variety of markets.”
“Despite all the popularity and media hype around premium devices, we continue to witness a shift in many companies' portfolios geared towards affordable devices with premium-type styling compared to flagship models. Companies have started to implement a single premium design language that ultimately blurs the lines between the high-end and the low-end, allowing the average consumer to jump on the brand without a hefty upfront investment,” he added.
| 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 retained top spot, seemingly unfazed by the Note 7 recall neither growing or contacting y-o-y, although the bulk of its sales are in the mass to the mid-market range. Run-out discounts on the Galaxy S7/Edge helped move last year models. But 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.
Apple sales remained flat. 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. It also refreshed its flagship smartphone by introducing (Product)Red. Rumours of the special edition 10th anniversary iPhone in September may have slowed Apple sales.
But, more and more the world is in two camps and switching between Android and iOS or vice versa is rare as people invest more in music and apps for their chosen ecosystem. Mid-market Android phones appear to be the main beneficiary of any switch in allegiance.
Chinese vendors Huawei, OPPO, and vivo are the true winners this quarter. See iTWire’s article on what the Chinese market bought in Q1 here.
Huawei sustained its dominance in China growing 21.7% to 34.2 million. It is creating a very strong and stable position the mid-range with its Y Series and Honor brand and premium market with the P and Mate Series.
In the U.S. the brand has failed to grab consumer's attention and that may change with the new Leica Dual Camera P10 and P10 Plus – these are a very strong third option in the flagship range outside of Apple and Samsung.
OPPO's mid-range, camera-focused, 5.5” AMOLED R9s and 6” R9s Plus are crucial models in China that helped it to see strong shipments in that market. OPPO's growth has been stronger outside of China with nearly a quarter of shipments from international markets. It is now pursuing more growth in new international markets like India (its A57 offering twice the features for half the price is doing very well there).
It has been aggressive in both above-the-line and below-the-line activities, stepped up its after-sales service in several Southeast Asian countries such as Indonesia by increasing its number of service centres.
Vivo – BBK owns OPPO, vivo and One Plus - 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. What is more impressive is that combined sales with OPPO total 43.7% and BBK is the company to watch.
It stepped up with its marketing efforts in India and was 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.
In summary
Q1 had a surprising 4.3% y-o-y growth led by the Chinese tigers who seem unstoppable.