Political and economic uncertainty in the region affected smartphone sales as three major markets witnessed presidential elections.
New Delhi, Hong Kong, Seoul, London, Beijing, San Diego, Buenos Aires –
March 1st, 2019
Smartphone shipments in the LATAM region declined by more than 1% year-on-year in 2018, making it the first time ever that the market has contracted in the region, the latest data from Counterpoint Research shows.
While declining smartphone sales was a global phenomenon in 2018, the LATAM region caught up with the trend at the drop of a hat due to the political and economic uncertainties in the region. Commenting on the overall market, Tina Lu, Senior Analyst at Counterpoint Research said, “With the exception of Chile, most countries in LATAM had a year-on-year decline in smartphone sales driven by the slowdown in the rate of replacement. The year was also marked by political and economic uncertainty across the region. Colombia, Mexico, and Brazil witnessed presidential elections which added to the political turmoil. The decline was led by Argentina and Brazil. While 2018 was particularly bad for Brazil as it was suffering from an economic crisis stemming out of the political uncertainty in the country, there could be some recovery in 2019. Argentina’s problems appear to be more long term as it is not possible to fix the inflationary economy in the short-term.”
Tina added that while the LATAM consumer has slowdown replacements, investment in a new phone is increasing. “Overall average selling price (ASP), in LATAM increased by 5% year-on-year. The top brands saw an increase in ASP while second-tier brands had a decline in ASP. The price band of US$150-US$249 grew more than 10% year-on-year, driving the overall ASP growth”.
In terms of the performance of various brands, Samsung’s leadership in the LATAM market started to face challenges in 2018. Commenting on the performance of various brands, Parv Sharma, Research Analyst at Counterpoint Research said, “Samsung’s leadership position has been challenged for the first time in the LATAM market since it became the top brand in 2012. For example, in Peru, it lost its lead to Huawei. The Korean brand also lost significant share during Q3 2018 as its J series was becoming old and it launched a refreshed version only in Q4 2018. The new J series and other new models, as well as a price cut, helped Samsung recover some market share in Q4 2018.”
Commenting further on the channel development, Parv noted, “Except for Brazil and Argentina, LATAM is still a market dominated by operators. Although, in the last few years the open market has gained participation in the market. This is driven by decreasing subsidies from the operator, but mainly by the retail channel offering multiple installment payment plans for unlocked devices. The possibility to pay on installment is extremely important for the LATAM consumer”.
Exhibit 1: LATAM Smartphone Market Share
Source: Counterpoint Research Market Monitor Q4 2018
- 4G smartphones sales contributed 91% to the total smartphone category during 2018.
- Top five brands captured 71.6% of the total smartphone market.
- Samsung led the market, and it still holds almost three times as much market share as the next competitor.
- Samsung’s share was driven by the new J series. All five top-selling models in LATAM during 2018 was the Samsung J series.
- Motorola continues to be the second most important brand in the market. Brazil and Argentina market led its success followed by Colombia and Mexico.
- Motorola’s strong performance came despite the OEM withdrawing its C series from the market at the beginning of 2018. The E series, with a slightly higher ASP, was able to keep up the volumes and even increased it slightly.
- Huawei had a record shipment in the region. It’s 2018 shipment grew 51% year-on-year by volume. By the end of the year, the brand was the leader of the market in Peru, and a very solid number two in Chile and Colombia.
- Huawei is still not present in Brazil and it pulled out of Argentina in Q3 2018. Under current government policies, it might be difficult to enter Brazil in 2019. Huawei faces challenges to manufacture outside of China, and it doesn’t look like it will
- Yet, Huawei’s biggest increase was in value. It increased its ASP as compared to 2017.
- Huawei’s best-selling model in 2018 was P20 Lite. This model arrived in LATAM during Q2 2018, nevertheless, it became the top-selling model. It combined highly desirable features at a reasonable price.
- LG smartphones shipment decline -31% annually due to decreasing sales in most LATAM countries.
- Apple increased its share slightly in 2018, although it maintained a very similar volume. Apple managed to do this by keeping iPhone 6 and 6S in some key markets such as Mexico and Chile.
- Therefore, Apple’s ASP in the region did not grow despite the fact that it launched more expensive models.
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The Market Monitor research is based on sell-in (shipments) estimates based on vendor’s IR results, vendor polling triangulated with sell-through (sales), supply chain checks and secondary research.
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