The smartphone market’s growth is all flat globally in Q1 2016, according to data from research firm International Data Corporation (IDC). At 0.2 per cent, this quarter marks the smallest year-over-year growth on record.
The reason for this ‘flat growth’ is smartphone saturation in developed markets along with a decline in shipments from both Apple and Samsung, says IDC. Interestingly the list of top five vendors in the world now includes Oppo and ‘vivo’, two newer Chinese brands that have dislodged previous fourth and fifth place players Lenovo and Xiaomi.
The research firm says that the fall of Lenovo and Xiaomi shows that ‘customer’ loyalty’ is something that is hard to maintain for newer players.
Based on IDC’s latest numbers and how the list has looked in the past, Samsung and Apple continue to occupy the top two positions, while the rest of the spots remain up for grabs.
“Lenovo benefited with ASPs below US$150 in 2013, and Xiaomi picked up the mantle with ASPs below US$200 in 2014 and 2015. Now Huawei, OPPO, and vivo, which play mainly in the sub-US$250 range, are positioned for a strong 2016,” said Melissa Chau, senior research manager with IDC explaining the change of guard in positions.
According to IDC’s analysis, the challenge for most of the players is to do well outside China, something which has proven to be tricky. Huawei, which comes in at number three in the list, has managed to challenge this with premium devices like the Nexus 6P doing well.
“While Huawei is furthest along in terms of international recognition, selling equally impressive volumes outside of China remains a challenge for many of these brands, whether it is Xiaomi, Lenovo, OPPO, or vivo. Their ability to drive local growth no longer applies when it comes to international expansion, where premium branding quickly turns to price competition,” said Anthony Scarsella, research manager with IDC’s Mobile Phone team.
In terms of individual rankings, Samsung remains on top with the S7, S7 edge “selling vigorously in the month of March”. IDC also says that in emerging markets, the company’s J series has helped it win “both budget conscious consumers and first-time buyers.” Samsung shipped close to 81 million smartphones in the quarter.
Apple remains at number two, and faced its “first-ever year-over-year decline in the first quarter.” The report notes that iPhone 6, 6 Plus owners have not felt the need to upgrade to the 6s series. The same was acknowledged by Apple CEO Tim Cook in the company’s investor earnings call, where he said that the upgrade rate for iPhone 6s was not high, compared to when iPhone 6 had launched.
IDC also said that the $399 price of the iPhone SE won’t help it win especially in “India and China.” It should be noted that Apple’s results did not include iPhone SE shipments.
Huawei comes in at number three with 27.5 million shipments. IDC says that “premium devices like the P9, Mate Series, and Nexus 6, along with entry level devices from its Honor brand, should help Huawei gain further traction worldwide.”
Oppo was at number four shipping 18.5 million smartphones, and according to IDC it has seen 20 per cent of shipments outside of China in 2015, which boosted its growth. Vivo is at number five, and the company’s retail presence and marketing in lower-tier markets is particularly strong, which has boosted growth. In India, vivo is the official IPL tournament sponsor, which has increased brand presence. Vivo saw 123.8% year-over-year growth.