2017: A Year of Mixed Results in the Latin American Smartphone Market

According to the latest research from Counterpoint’s Market Monitor service the Latin American (LATAM) smartphone market grew 5% YoY in 2017.  Samsung continues to be the absolute leader of the region with more than 38% share.

Commenting on the 2017 smartphone market trends, Counterpoint’s Senior Analyst Tina Lu, highlighted, “The LATAM smartphone market grew 5% YoY in volume. However, we see a deceleration in the rate of replacement. Despite healthy economic conditions, the market decreased by more than -5% in Q4 2017 when compared to the same quarter in the previous year. This is the first time that the smartphone market has had a YoY decline, denoting that the smartphone market is close to maturity. We expect this softer rate of replacement to continue throughout 2018, leading to a flat year in 2018.”

Miss Lu added: “On the value side, the smartphone market grew only 1% YoY. This was caused by a 17% YoY decrease of the premium segments (>$400), which led to slight drop of ASPs. Devices such as the iPhone or Samsung Galaxy S-series in LATAM have always been more expensive than the same model in the US. Differences in price can range between 25% to 110% higher, depending on the country. At the same time, the LATAM average consumer purchasing power is notably lower than Europe or US.  A smartphone is a significant investment for the LATAM consumer, inducing them to hang on to the device longer, resulting in slower rate of replacement.”

Commenting on vendor performances, Parv Sharma, Research Analyst, noted, “Samsung has been the absolute leader of the LATAM market.  Its success is due to its strong foothold in the region–especially in Brazil and Argentina. Assertive investment in marketing, sales, supply chain and aggressive prices has rewarded Samsung.  The company grew volumes more than 14% YoY. Samsung’s focus on having the best supply chain network, which starts with a well-established local manufacturing and assembly process, has allowed Samsung to launch the Galaxy S8 and Galaxy S9 almost at the same time as the models were launched globally. This competitive edge has helped it to increase its market share, which is more than triple its closest competitor.”

 

Exhibit 1: Percentage LATAM Shipment Volume Share – CY17

Source: Counterpoint Research Market Monitor CY17

Market Summary

  • LATAM smartphone sales increased 5% YoY, reaching 147M units in 2017.
  • 89% of the mobile phones shipped were smartphones. Smartphone penetration increased almost 2% YoY.
  • LTE reached 87%. 25% increase compared to CY16.
  • LATAM is still a highly concentrated market, top 5 brands represented almost 71% of the market, leaving more than 190 brands battled for the remaining 29% of the market.
  • Only two (Motorola and Samsung) out of the top 5 brands had positive YoY growth.
  • LATAM is still a mid-low range market. $100-$199 is the largest segment in volume and value. This segment has grown around 13% YoY.
  • The main feature offered in this segment were >5” screen and between 8mp-13MP camera.
  • Samsung J-series, LG K-series and Motorola G-series have all contributed to the growth of the $100-$199 segment.
  • Ultra-low segment (~$99) grew around 5% YoY. Its growth has been impacted partly by the increased offering of refurbished (certified and non-certified) devices.
  • The mid-high segment ($300-$399) grew more than 6%, mainly driven by older flagship models from Apple and Samsung.
  • The smartphone category ASP decreased by 3% compared to CY16.

   

Exhibit 2: Latin America Price Band Volume Variation 2016 vs 2017

Source: Counterpoint Research Market Monitor CY17

OEM Performance

  • Motorola gained 380 basis points of share YoY. It was the brand with the biggest YoY growth in LATAM. The launch of the C series with a sell-in price below $100 and its effort to improve its relationship with America Movil has enabled it to add a few models to the operator’s portfolio. This has boosted its performance and it has become second in volume share within the region.
  • Samsung grew 320 basis points of share YoY. It was the brand with the biggest growth in terms of volume. It has been the absolute leader, in both volume and value, in the region.
  • 9 out of 10 top selling smartphones models were from Samsung J series.
  • Many Apple users are postponing the replacement of their device, resulting in a decline of 92 basis points of share.
  • LG lost 91 basis points of share. Despite its aggressive pricing on the K series, it could not fight against Samsung and Motorola aggressive marketing strategies.
  • Huawei decreased 70 points. It lost its momentum as it focused on promoting higher- end models.
  • Lanix led the Local Kings (Brands) space. It successfully added a wide portfolio of very low-end smartphones for the megacarrier America Movil.

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