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US Smartphone Sales Rise 2% in a Subdued Promotional Q4

   San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul

March 19, 2018

According to the latest research from Counterpoint’s Market Pulse program, the US market sold through 51.2m smartphones during the final quarter of 2017. This is a 2% increase from the same period in 2016 when 50.2m smartphones were sold.

Commenting on the quarter, Research Director Jeff Fieldhack stated, “There was not a lot of overall change in volumes despite the anticipation of a big upgrade quarter including the Apple ‘super cycle’.  One, promotions were more rational this year.  Second, there were tight supplies of iPhone X through mid-December so it made no sense for carriers to do anything aggressive without supply.  In addition, Sprint and T-Mobile did not engage others in a ‘match it or beat it’ promotional challenge.  Late quarter BOGOs (buy one get one) helped Verizon and AT&T gain some late net adds, but most of the promos during the quarter required a new line purchase.  This was much less appealing than last year’s ‘free upgrade when handing in a used high-end device’ promotion.”

Fieldhack added, “Refurbished devices have quietly started to affect new device sales.  Carriers and other collection channels in the US are hoarding A and B grade flagships to cover warranty devices and to resell within prepaid channels. Flagship refurbs continue to see increasing appeal over mid-tier devices.”

Despite the diminished promotional season, Apple had another great quarter in its home market.  Apple had a record sell-in and sell-thru  (here)More impressive than the 16% volume gain was the over $100 ASP gain. Apple will attempt to keep the momentum going through 2018 with many bundling opportunities which can help potentially grow the ecosystem via smartwatches, tablets, Apple HomePod, and accessories.

Commenting on handset OEM Q417 performances, Research Director, Neil Shah, added, “The US remains an all-or-nothing market.  Apple, Samsung, LG and ZTE controlled 89% of Q4’s sell-in volume share.  Apple sell-in was up 16% as X, 8, and 8 Plus were top sellers.  Samsung held steady, up just 1%, but sold more premium devices in the quarter.  LG grew 15%, but it grew from low and mid-tier sales.  The biggest gainer during the quarter was Motorola, up 75% YoY.  E4 and E4 Plus sales in multiple prepaid and national retail channels fueled the growth.  There remains a battle within open channels and carrier prepaid between ZTE, LG, Motorola, and Samsung.  This will continue in 2018.”

Commenting on carrier channels, Research Director, Jeff Fieldhack, added, “Year-over-year, there was limited change in the size of carrier channels.  AT&T gained slightly as their upgrade percentage rose YoY.  Sprint improved postpaid sales and gained on churn improvements within Boost.  T-Mobile still dominated phone net adds during the quarter, but YoY the company’s upgrade rate fell 2.5%, which slightly lowered overall smartphone volumes.  Verizon remained the largest channel, but it also fell slightly as upgrade rates were down over the same period last year.”

Research Director, Neil Shah, added, “As smartphone sales decelerate, carriers are anxious to fill the void with new revenues. Smartwatches saw a spike due to solid sales of the Apple Watch Series 3.  Look for carriers to continue to give a period of free service and also promote discounts on extra lines for the device in 2018.  Carriers are also accelerating the buildout of their IoT network coverage and services.  In addition, the carriers are already positioning themselves for a 5G marketing campaign that has already begun.  No carrier wants to be left behind.  T-Mobile and Sprint were late to LTE and it cost them subscribers for years.”

For more on Q4’s handset sales insights see US Market Analysis 4Q17.  And, for further carrier channel insights see, USA Operators Report.

Background:

Counterpoint Technology Market Research is a global research firm specializing in detailed industry analysis of the TMT sectors. It services major technology firms and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of over 15 years in high tech industries.

Analyst Contacts:

Jeff Fieldhack
+1 858 603 2703
jeff@counterpointresearch.com

Neil Shah
+91 9930218469
neil@counterpointresearch.com

Jeff has 25+ years experience in technology research, business development, competitive intelligence, and business management. Prior to joining Counterpoint Research, Jeff held various research & product development roles at Microsoft, Nokia, Roth Capital Partners, and Gartner. Jeff is a member of many telecom industry organizations including Colorado Wireless Association, repair.org, CommNexus, and is a regular speaker at major telecom industry events. He was a 4x NCAA all-American in tennis and is a 12-time finisher of the Hawaii Ironman World Championships.

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