As the global smartphone shipments grew five per cent year-on-year (YoY) reaching 400 million units in the third quarter of 2017, India and South-East Asia are fast becoming the next battleground for Chinese brands, market research from Counterpoint Research has said.
Driven by strong sales in both India and China, Xiaomi emerged as the fastest growing brand – an increase of 81 per cent YoY. The company shipped 28 million smartphones, capturing seven per cent market share in Q3 2017.
The key reason behind the Xiaomi’s growth can be attributed to a streamlined supply chain and being more effective in securing key components. Additionally, Xiaomi has focused on expanding its offline distribution channel under the Mi Home brand, thus expanding its total addressable market.
Being the largest smartphone market in the world, China continues to be very influential in crowning the top smartphone OEMs. Chinese brands such as Vivo, OPPO and Huawei remained the fastest growing smartphone brands. Samsung, Apple and LG also showed growth during the quarter.
Samsung led the smartphone market by volume with a market share of 20.6 per cent in the third quarter of 2017. Its smartphone shipments recorded a growth of nine per cent annually during the quarter.
While, sequentially, Samsung shipments grew three per cent driven by the launch of the Note 8 and strong sales of new J-series, revenues were down due to higher sales of low and mid-end segment smartphones.
Apple shipments grew three per cent annually shipping 46.7 million units globally. Apple shipments grew in China driven by an increased mix of its older generation iPhones and channel fill for the iPhone 8 series. Demand for older generation iPhones also remained strong in markets like India, Vietnam, Indonesia and other fast growing markets.
However, Apple exited the quarter with some iPhone 8 inventory due to softer than expected demand compared to the iPhone 7 series. Many users delayed their purchase due to the anticipation for the iPhone X, though supply-side challenges might limit the initial volumes available. If successful, the iPhone X will help Apple to grow both volume and value as demand is likely to spread beyond normal cyclic quarters.
Huawei shipped a record third quarter of 39.1 million units, up 16 per cent annually driven by strong performances in Europe and emerging markets. However, in China Huawei lost the top spot to OPPO this quarter by the slightest of margins.
Huawei positions its flagship models just below the premium offerings from Apple and Samsung. This strategy is designed to increase premium market penetration while maximising revenue and profit.
Oppo and Vivo were the fourth and fifth largest brands during the quarter capturing market share of 8.4 per cent and 7.1 per cent, respectively.
LG registered 13.9 million smartphone shipments in Q3 2017 with strong performances in domestic and North America markets. LG recorded strong performance of its mid-tier series smartphones like Q6 and K-series. Sales of the G6 also remained steady.
Lenovo (including Motorola) captured the eight spot with a market share of 3.2 per cent. Motorola witnessed strong growth during the quarter in markets like LATAM and India.
ZTE (include Nubia) and Alcatel continue to face tough competition in high growth markets which led to declining market share during the quarter.
Smartphone penetration reached over 80% of all the mobile phones shipped in the quarter and the top 10 brands accounted for 75 per cent of smartphone volumes in Q3 2017.
“Most of the brands are now moving beyond regional boundaries to explore growth opportunities in new markets. During the quarter the leading smartphone players grew faster in international markets than domestic markets. Key OEMs have recently launched their flagships at higher price points as compared to the previous flagship launches,” said Counterpoint Research Analyst, Shobhit Srivastava.
“This indicates that leading smartphone players are now gearing up to target higher price points in a bid to position their devices as quality products in the minds of the consumers. This trend is currently being driven by developed regions like China, Japan, and Europe, which pushed the overall average selling price of the device,” Srivastava added.
