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Smartphone vendors shipped a total of 362,9-million units worldwide in the third quarter of 2016 (3Q16) and, despite the recall of Samsung’s Galaxy Note 7, volumes were up 1% compared to 3Q15 when 359,3-million units were shipped.
According to preliminary results from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, sequential shipments grew 5,3% from 344,7-million in the second quarter of 2016
“Samsung’s market dominance in the third quarter was unchallenged in the short term even with this high-profile Galaxy Note 7 recall, but the longer term impact on the Samsung brand remains to be seen,” says Melissa Chau, associate research director” mobile devices at IDC.
“If the first recall was a stumble for Samsung, the second recall of replacement devices face-planted the Note series. In a market that is otherwise maturing, Christmas has come early for vendors looking to capitalise with large-screened flagship alternatives like the Apple iPhone 7 Plus and Google Pixel.”
Anthony Scarsella, research manager: mobile phones at IDC, adds: “With Samsung’s Note 7 finally laid to rest, both Samsung and other vendors will need to invest both time and money into properly testing devices to avoid a future incident of this proportion.
“The recall of the Note 7 represents an industrywide wake-up call that will undoubtedly lead to a more vigorous testing and certification process moving forward.”
The top five vendors remain unchanged from last quarter despite double- and triple-digit growth from the leading Chinese vendors Huawei, OPPO, and Vivo.
While Samsung and Apple continue to challenge each other at the top, these upcoming players have delivered value-packed devices that offer consumers top-shelf features at a fraction of the cost compared to the market leaders.
Phones like the OPPO R9 and the Vivo X7 have become serious competitors in China and are also witnessing mild success in Western Europe thanks to new athletic sponsorships across various countries.
Whether or not these brands can make an impact in the US market remains to be seen, but success will be crucial if aspirations of growth are a top priority.
The continued success of the Galaxy S7 and S7 edge helped Samsung to maintain volumes in 3Q16 despite the recall and negative publicity of the Note 7 fiasco. Outside of Samsung’s flagship S7, the more affordable J-series of devices continued to steadily drive volume in both developed and emerging markets with flagship-styled devices across various price points and display sizes.
Samsung will need to put the Note series to rest as quickly as possible and look to their S7/S7e to captain the ship and keep Samsung users on board for the long haul.
The new iPhone 7 and 7 Plus drove Apple’s third quarter shipments of 45,5-million units, down 5,3% from the 48-million units last year. Higher than expected iPhone 7 Plus demand outstripped supply, which should be alleviated through the fourth quarter, helped by new features such as water resistance, faster processing, improved optics, and larger storage capacities. A new “jet black” colour option has also proven popular with many carriers and retail partners are still showing the device on back order.
IDC believes that the iPhone could witness greater success come next quarter as it stands to likely benefit from the Note 7 recall that took place earlier this month.
Huawei shipped 33,60million units, up a notable 23% from last year. The current dual-camera P9 flagship continued to help with its momentum in China despite the higher price tag compared to some of its rivals. Huawei’s Honor brand also found success with the new V8, as the mid-tier device sold well both in and outside of its home country.
Outside of China, shipments have grown drastically as China now represents 53% of shipments compared to 60% last year. Huawei continues to maintain a strong brand in Europe and is finding success with the P8 and P9 family, where it is taking away share from Samsung and Apple with competitive specs at lower price points with the Lite versions. Huawei may now have it sights set on the US, as we have the New York unveiling of its next Mate series flagship (Mate 9) in early November.
In China, OPPO continued to do well largely due to its R9 device that saw continued success in the market and its domestic popularity helped it further close the gap to global number number three, Huawei. OPPO has also pursued an aggressive expansion strategy outside of China, with shipments to the rest of Asia/Pacific tripling since the same quarter a year ago. It particularly experienced good growth in India as it employed more staff to be positioned at storefronts to promote smartphones to consumers.
On its home turf, vivo ploughed more investment into marketing in order to expand its reach via TV advertising, targeting high-tier all the way down to lower-tier cities in China. vivo also held a number of promotional activities and saw growth in China largely due to its X7 series. Its strong coverage in the Tier 3 to Tier 5 cities continued to help it to excel.
Outside of China, vivo’s presence is still relatively small, but it managed to double its shipments quarter year over year in 3Q16. In India, it grew by increasing its marketing investments to expand its reach via television advertisements