Global smartphone sales were up 3.9 per cent year-on-year in the 2016 first quarter, while Apple registered its first year-on-year double-digit decline, according to Gartner.Representing 78 per cent of total mobile phone sales for the quarter, smartphone sales were driven by demand for low-cost smartphones in emerging markets and for affordable 4G smartphones amid 4G connectivity promotion plans from communications service providers in many markets worldwide, Gartner stated.
“In a slowing smartphone market where large vendors are experiencing growth saturation, emerging brands are disrupting existing brands’ long-standing business models to increase their share,” Anshul Gupta, Gartner research director, commented.
“With such changing smartphone market dynamics, Chinese brands are emerging as the new top global brands.
“Two Chinese brands ranked within the top five worldwide smartphone vendors in the first quarter of 2015, and represented 11 per cent of the market. In the first quarter of 2016, there were three Chinese brands – Huawei, Oppo and Xiaomi – and they achieved 17 per cent of the market.”
Among the brands, Oppo had the best performance for the quarter, moving into the number four position, posting unit sales growth of 145 per cent, like Huawei and Xiaomi, seeing strong growth in China and taking share from players such as Lenovo, Samsung and Yulong.
Huawei registered strong smartphone demand in Europe, the Americas and Africa, with Xiaomi and Oppo seeing their smartphone sales in emerging Asia Pacific rise 20 per cent and 199 per cent, respectively.
Samsung, the number one vendor, extended its lead over Apple with a 23.2 per cent market share (down from 24.1 per cent year-on-year), while iPhone sales were down 14 per cent.
“Samsung’s Galaxy S7 series phones and
renewed portfolio positioned it as a strong competitor in the smartphone
market, and more so in the emerging markets where it has been facing
fierce competition from local manufacturers,” Gupta observed.
In second place, Apple claimed a 14.8 per cent market share, down from 17.9 per cent year-on-year.
Rounding out the top five, Huawei captured an 8.3 per cent market share, up from 5.4 per cent year-on-year, Oppo claimed a 4.6 per cent share, up from 2 per cent, and Xiaomi claimed a 4.3 per cent share, down from 4.4 per cent.
Lenovo slipped out of the top five smartphone vendor ranking and top 10 mobile phone vendor market in the quarter.
“Lenovo had another challenging quarter with its worldwide smartphone sales declining 33 per cent,” Gupta commented. “Its smartphone sales fell by 75 per cent in Greater China, where it faced strong competition from local brands. Lenovo is also struggling to bring synergies with Motorola’s device business, managing lower costs and overheads of the two brands.”
In the smartphone operating system market, Android regained share over iOS and Windows, taking out an 84.1 per cent market share, up from 78.8 per cent year-on-year. iOS claimed a 14.8 per cent share, down from 17.9 per cent year-on-year, with Windows claiming a 0.7 per cent share, down from 2.5 per cent.
“As mature smartphone markets are reaching saturation, Google is pursuing new revenue growth opportunities by expanding the reach of its platforms in cars, wearables, connected homes, immersive experiences and more,” Roberta Cozza, Gartner research director, commented.
“Despite the Android platform’s advancements and its dominant market share, the challenges of profitability remain for a number of Android players. This will have an impact on the vendor landscape where new or more innovative business models will increasingly become key to succeed.”
Gupta additionally noted that the announced return to the smartphone and tablet markets by Nokia “will not be an easy mission”.
“In today’s market, it takes much more than a well-known brand to sell devices,” he commented. “Making good hardware won’t be an issue for Nokia, but users need a compelling reason to remain loyal to the same brand.
“Furthermore, that the smartphone market is slowing down makes it difficult for mobile phone vendors to reach previous levels of growth. New company HMD is entering the market at a less prosperous time, making it even more difficult for the vendor to do well in the short term.”