600+ Brands Fight For Just 1/4th of The Global Smartphone Market in Q3 2017

Global smartphone shipments grew 5% YoY in Q3 2017.  Top 10 players now capture 75% of the market thereby leaving just a quarter of the market for the remaining 600+ brands to compete.

The global smartphone market continues to grow in single digits driven by growth in emerging markets. In such a scenario, we have seen key hardware differentiators proliferate to lower price points at much faster rates. For example, alternative aspect ratio 18:9 devices already penetrated sub $150 segment within two quarters of launch in the premium segment. This indicates how cut-throat the competition is within the industry.  Brands are striving for differentiation across price bands. In addition, the increasing share of leading brands is putting additional pressure on smaller brands which can lead to consolidation in some of the OEM-crowded regions going forward.

Most of the brands are now moving beyond regional boundaries to explore growth opportunities in new markets. During the quarter the leading smartphone players grew faster in international markets than domestic markets. Key OEMs have recently launched their flagships at higher price points as compared to the previous flagship launches. This indicates that leading smartphone players are now gearing up to target higher price points in a bid to position their devices as quality products in the minds of the consumers. This trend is currently being driven by developed regions like China, Japan, and Europe, which pushed the overall average selling price of the device.

Exhibit 1: Global Smartphone Shipments Ranking and Market Share – Q3 2017


Source: Counterpoint Research: Quarterly Market Monitor Q3 2017

Global smartphone growth was driven by the mid-tier segment.  The $300-$399 price band became the fastest growing segment globally and also in China.  Apple, Huawei, OPPO, and Vivo were the fastest growing smartphone brands in this fastest growing segment. Premium smartphones declined YoY due to increased mix of older generation iPhones, but the segment will likely reach record shipments driven by iPhone 8 and iPhone X sales next quarter.

Exhibit 2: Global Smartphone Price Band Growth – Q3 2017

Market Summary

  • Global smartphone shipments grew 5% YoY reaching 400 million units in Q3 2017, a third quarter record.
  • Smartphone penetration reached over 80% of all the mobile phones shipped in the quarter.
  • Top 10 brands account for 75% of smartphone volumes in Q3 2017.
  • Chinese brands Xiaomi, Vivo, OPPO & Huawei remained the fastest growing smartphone brands. Samsung, Apple and LG also showed growth during the quarter.
  • Being the largest smartphone market in the world, China continues to be very influential in crowning the top smartphone OEMs.
  • Apart from China, India and South-East Asia is fast becoming the next battleground for these Chinese brands. A Chinese brand holds a top five ranking in each of these markets.

OEM Performance Insights

  • Samsung led the smartphone market by volume with a market share of 20.6% in Q3 2017. Its smartphone shipments recorded a growth of 9% annually during the quarter.
  • Sequentially, Samsung shipments grew 3% driven by the launch of the Note 8 and strong sales of new J-series. Revenues were down for Samsung due to higher sales of low and mid-end segment smartphones.
  • Apple shipments grew 3% annually in Q3 2017 reaching 46.7 million units globally.
  • Apple shipments grew in China driven by an increased mix of its older generation iPhones and channel fill for the iPhone 8 series. Demand for older generation iPhones also remained strong in markets like India, Vietnam, Indonesia and other fast growing markets.
  • However, Apple exited the quarter with some iPhone 8 inventory due to softer than expected demand compared to the iPhone 7 series. Many users delayed their purchase due to the anticipation for the iPhone X, though supply-side challenges might limit the initial volumes available. If successful, the iPhone X will help Apple to grow both volume and value as demand is likely to spread beyond normal cyclic quarters.
  • Huawei shipped a record third quarter of 39.1 million units, up 16% annually driven by strong performances in Europe and emerging markets.
  • However, in China Huawei lost the top spot to OPPO this quarter by the slightest of margins. Huawei has a wider portfolio across a broad range of price brands. It is positioning its flagship models just below the premium offerings from Apple and Samsung. This strategy is designed to increase premium market penetration while maximizing revenue and profit.
  • Oppo and Vivo were the fourth and fifth largest brands during the quarter capturing market share of 8.4% and 7.1%, respectively. Strong performances in China helped these brands to retain their slot among the top five brands in global smartphone market.
  • Xiaomi emerged as the fastest growing brand YoY (+81%) driven by strong sales in both China and India. Xiaomi was also the fastest growing brand in both China and India during the quarter.
  • Xiaomi shipped 28 million smartphones, capturing 7% market share in Q3 2017.
  • The key reason behind the Xiaomi’s growth can be attributed to a streamlined supply chain and being more effective in securing key components. Additionally, Xiaomi has focused on expanding its offline distribution channel under the Mi Home brand, thus expanding its total addressable market.
  • LG registered 13.9 million smartphone shipments in Q3 2017 with strong performances in domestic and North America markets. LG recorded strong performance of its mid-tier series smartphones like Q6 and K-series. Sales of the G6 also remained steady.
  • Lenovo (including Motorola) captured the 8th spot with a market share of 3.2%. Motorola witnessed strong growth during the quarter in markets like LATAM and India.
  • ZTE (include Nubia) and Alcatel continue to face tough competition in high growth markets which led to declining market share during the quarter.


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