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LATAM Smartphone Shipments up 22.1% YoY in Q1 2021; Samsung Leads With 42% Share

 

Boston, Toronto, London, New Delhi, Hong Kong, Beijing, Taipei, Seoul – June 10, 2021

LATAM smartphone shipments surged by 22.1% YoY in Q1 2021 but decreased by 4.8% QoQ due to seasonality, according to the latest Market Monitor report from Counterpoint Research. The competition fuelled by Samsung and Motorola launching refreshed models and new Chinese OEMs entering the region drove the market growth.

Commenting on the market dynamics, Principal Analyst Tina Lu said, “In Q1 2021, the region’s smartphone market saw an extraordinary 22.1% growth, as last year it was impacted by a shortage of products coming from China, and COVID-19 lockdowns by the end of the quarter. This year, it still faced some product shortages due to inadequate component supplies, especially the chipset. But this impacted mainly the ‘Local Kings’ and smaller brands, as their negotiating power is lower.”

Lu added, “The first quarter of the year is usually a slow one, as most of the Southern Hemisphere is on summer holidays. But fierce competition fuelled by new Chinese OEMs entering the region and Samsung launching new models in the A-series while increasing advertising to announce the S-series, drove the market growth. This shows that the smartphone market is resilient in the face of tough conditions due to the pandemic. Brazil ranks third globally in terms of most number of COVID-19 cases while Mexico ranks fourth among countries with the highest number of COVID-19 deaths.”

Smartphone Shipment Market Share, Q1 2021

 

Source: Counterpoint Research Market Monitor, Q1 2021

 

Commenting on the regional performance, Research Analyst  Parv Sharma said, “All major LATAM countries except Chile saw double-digit growth. Argentina, Peru and Brazil drove the region’s overall growth. The economic recession due to the pandemic failed to diminish the volume of smartphones sold in the region, partly because of the smartphone becoming an essential gadget and partly due to the OEMs driving the market. However, the pandemic did impact the consumer’s smartphone purchase budget, which the OEMs were fast to react to and increase their entry-level models.”

 

Smartphone Shipment Growth by Country, Q1 2021 vs Q1 2020

 

Source: Counterpoint Research Market Monitor, Q1 2021

 

Market summary

  • Samsung remained the region’s leading brand. It was aggressive on the sell-in front. Four out of ten smartphones sold in the LATAM market were from this OEM.
  • Samsung’s volume increased QoQ despite the seasonality factor. It started 2021 by renewing part of its A-series portfolio. It also advertised heavily during the launch of new flagship models — Galaxy S21, Galaxy S21 Plus and Galaxy S21 Ultra — in February. This drove higher sales for all the other lines from this brand.
  • Motorola volume increased more than 88% YoY. This growth came from the ground gained from Huawei and due to supply constraints faced by the OEM last year following the COVID-19 outbreak in China.
  • Motorola remained a solid second player in the region, although closely challenged by Xiaomi and even OPPO in Mexico.
  • Xiaomi continued its YoY growth. However, the growth reached a plateau during the quarter as Xiaomi has no local manufacturing in Brazil. At the same time, it is still building its brand in the rest of LATAM.
  • Xiaomi’s growth has been slightly challenged by new Chinese entrants in some countries, such as Colombia, Chile and Mexico.
  • Apple continues to grow. It leads the introduction of 5G handsets in the region with the iPhone 12 model. However, the iPhone 11 still takes a large portion of its volume.
  • ZTE doubled its volume and increased its share YoY. The brand expanded its participation in the LATAM market by entering the open channel. It is also growing its footprint in Peru and Colombia.
  • LG also managed to increase its volume and share, which is a breakthrough for the OEM that has been experiencing YoY declines for almost two years. The announcement that it plans to exit the mobile device market did not impact its performance during Q1 2021.
  • ‘Others’ saw a dramatic decrease as ‘Local Kings’ are now playing mostly in the 3G smartphone space. This group was most impacted by the chipset shortage.

 

The comprehensive and in-depth Q1 2021 Market Monitor is available for subscribing clients. Feel free to contact us at press@counterpointresearch.com for further questions regarding our in-depth research and insights, or for press enquiries.

Background:

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

 

Analyst Contacts:

Tina Lu

+54 91160411221
tina@counterpointresearch.com

 

Parv Sharma

+91 974-259-6030

Parv@counterpointresearch.com

 

Peter Richardson

+44 7917231934
Peter@counterpointresearch.com

 

Follow Counterpoint Research
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LATAM Smartphone Market Felt the Full Impact of COVID-19 in Q1 2020

Q1 2020 smartphone shipment in the LATAM market declined 20.8% YoY.

Xiaomi shipment grew more than 203%.

New Delhi, Hong Kong, Seoul, London, Beijing, San Diego, Buenos Aires – June 2nd, 2020

 

In the first quarter of 2020, the Latin American smartphone market declined 20.8% YoY and 30.1% from Q4 2019, according to the latest research from Counterpoint’s Market Monitor service. The first quarter in LATAM is typically slow due to the summer recess in the Southern hemisphere. But this year, it was also impacted by COVID-19. The drastic drop in the shipment of smartphones exposes the relatively low penetration of online sales in the region.

Commenting on the market’s development, Counterpoint Research Senior Analyst, Tina Lu, said: “As this year’s Chinese New Year took place before the end of January, and factories in China were scheduled to remain closed for part of February, many brands built enough inventory to last until March. So, despite the COVID-19 measures preventing factories from reopening, sales channels, in most LATAM countries, were not affected by the lack of supply. Brazil and Argentina were the only two countries that suffered due to component supply issues from China”.

Tina added: “From the consumer side, COVID-19 hit the region only during March, when most LATAM countries started to lockdown. The degree of lockdown varied among countries. Argentina, Colombia, Ecuador, and Peru had complete lockdowns for the first few weeks, with everything closed except food stores, groceries, pharmacies, and pet stores. Products sold online were not allowed to be delivered unless deemed essential”.

Exhibit 1: Smartphone Shipment Decline by Region & Country, Q1 2019 vs Q1 2020

Source: Counterpoint Research Market Monitor Q1 2020

Commenting on the brands’ performance, Parv Sharma, Research Analyst, highlighted: “Another effect from the regional shutdown was the increase in brand concentration. The top 5 brands represented 76.3% share of the smartphone market, 3.3 percentage points higher than the same quarter last year. Xiaomi was the only brand that increased its volume during Q1 2020. Samsung dropped in volume but managed to increase its share. The vendor’s production pivot to Vietnam reduced China supply chain exposure, positioning it well among more China-dependent competitors”.

 

Exhibit 2: Smartphone Shipment Market Share 2020 Q1

Source: Counterpoint Research Market Monitor Q1 2020

 

Key Takeaways

  • Samsung was once again the absolute leader in the region. The COVID-19 crisis benefited it by increasing its share and widening the gap to its closest competitor.
  • Motorola’s shipment decreased by more than -26% compared to the same period last year. Motorola has manufacturing sites in Wuhan, which impacted the brand’s supply chain during most of February and part of March.
  • Despite the drop in shipment volume for Motorola, most of LATAM market sales channels did not experience a lack of inventory from the brand, during the quarter.
  • Huawei share and volume was also impacted, but not so much by the COVID-19 crisis. Instead, it was hit by the US trade ban. Mexico and Chile remain Huawei’s biggest markets, representing more than 60% of its regional volume. However, it has been steadily losing steam in Colombia.
  • Xiaomi more than tripled its volume YoY. It has started to get aggressive in Brazil, in which it has already opened two stores this year in Sao Paulo. It is also negotiating to start local manufacturing.
  • LG continues to decline YoY in the region. Brazil and Argentina remain the only markets in which it manages to hold market share.
  • Apple grew in volume and share compared to the same period last year. iPhone 11 is driving the growth of Apple in the region.
  • Other brands also saw steep decreases, with many at around half the volume from a year ago. This included not only ‘local kings’ but also small Chinese brands, which were all impacted by handset supply issues.
  • The feature phone market only declined by 0.3%. It has proven to be more resilient than the smartphone market.

 

The comprehensive and in-depth Q1 2020 Market Monitor is available for subscribing clients. Please feel free to contact us at press@counterpointresearch.com for further questions regarding our latest in-depth research, insights or for other press enquiries.

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.


 

Analyst Contacts:

Tina Lu

+54 91160411221

tina@counterpointresearch.com

Parv Sharma

+91 974-259-6030

Parv@counterpointresearch.com

Peter Richardson

+44 791-723-1934

Peter@counterpointresearch.com

 

Follow Counterpoint Research press@counterpointresearch.com    

LATAM Individual Markets Overview 2019

In 2019, the Latin America region represented only 10% of the global smartphone market. Nevertheless, it includes Brazil and Mexico, which are both among the top ten biggest markets worldwide. These two countries now have similar smartphone usage penetration, but they have quite different dynamics. Open distribution channels account for 80% of Brazil’s market. While in Mexico, 80% of the market is operator-driven.

LATAM countries have various levels smartphone penetration. Chile and Argentina have the highest, while Peru and Paraguay have the lowest. The varying maturity levels and local regulations largely dictate the competitive landscape:

  • Brazil and Argentina both require local manufacturing/assembling. It is a complicated process to set up local manufacturing, so only a few brands manage to do so, which makes these markets highly concentrated brand wise the same three brands represent more than 80% of the market. In both countries, Samsung has more than 40% share. Motorola is a distant follower and LG continues as #3. LG has been losing share in many other markets, but it enjoys a competitive advantage of local manufacturing in these countries.
  • Mexico: Samsung leads the market, but Huawei is a close contender. So much so that during two months in 2019, it overtook Samsung, making Mexico Huawei’s biggest market in the region. The battle for supremacy accelerated the replacement rate and increased smartphone penetration. Motorola is a solid #3.
  • Peru: the top 3 brands represent only 65% of the market. It is one of the most brand diverse markets in LATAM. It also has high feature phone penetration. Samsung and Huawei lead the market, while Motorola is a distant third. Peru has one of the lowest smartphone usages in LATAM, mainly because of the low 4G LTE coverage.
  • Chile is the most mature market in the region. It has LATAM’s highest smartphone penetration, rate of replacement and ASP. It is still an operator driven market, so brands need to have operator approval to succeed. Although it is a small market, it is among Apple’s top 3 market in LATAM. Samsung leads the market. Huawei’s performance was impacted by the US trade ban.
  • Ecuador is the smallest market in this infographic, but with high growth potential. 3G smartphones are still relevant, partly because of the price of the smartphone, partly due to the limited coverage of the 4G network. Samsung and Huawei lead the market. Bmobile, a local brand, is a distant #3.
  • Colombia is the third biggest market in LATAM. Samsung is the absolute leader. Huawei was challenging Samsung leadership in the market during Q1 2019. However, the trade ban imposed by the US government highly impacted Huawei causing a loss of share to Samsung and Motorola.

Samsung was the absolute leader in all the major market in LATAM in 2019. Motorola was a distant number two that excelled in Argentina and Brazil. Huawei was a strong number three, but its performance was impacted during the second half of the year.

The infographic is a high-level overview of the data we track in our quarterly Market Monitor Service.

Will Huawei’s Extraordinary Growth Story in LATAM Come to a Grinding Halt?

Huawei has been building momentum in LATAM with record volumes and a growth of 51% year-on-year (YoY) during 2018. Its growth came at a time when the market declined by 1%. And it isn’t as if Huawei was slowing down. In Q4 2018, its volume growth reached 130%, YoY. Astonishingly, this growth came despite Huawei not being present in around 37% of the LATAM smartphone market as it does not operate in Brazil and exited Argentina in Q3 2018.

By the end of 2018, Huawei was the leader of the market in Peru and a very solid number two in Chile and Colombia. In Colombia, Huawei became the second largest brand in 2018 and also the leading Chinese brand with 24% market share after including sales of its co-brand HONOR.  HONOR entered Colombia in H2 2018, and quickly picked-up share. In Mexico, its biggest LATAM market, Huawei has been increasing volumes through a two for one mix between high and low-price band devices and recently challenged Samsung to be the number one brand in the country. Even in Peru, Huawei keeps challenging for the top spot.

Exhibit 1: Huawei LATAM Shipment Volume Share Evolution

Source: Counterpoint Research Market Monitor

Part of Huawei success in LATAM is due to its improving reputation for offering excellent quality products. Heavy spending on marketing; up to several millions of dollars yearly, in sponsorship, and both online and offline campaigns has successfully built the Huawei brand in the region.

Further, its sales team was big enough to help the brand get into all channels and carriers. Huawei even opened flagship repair stores in most of the capital cities of the biggest countries in LATAM. All these efforts were quite synchronized.

However, just as it seemed Huawei was about to reach a peak for its consumer business unit, the US government decided to impose the export ban. Under a business-as-usual scenario, Huawei’s diligent efforts to enter Brazi would likely have been successful and further boosted its presence in LATAM. But in the current geopolitical environment, entering Brazil looks increasingly unlikely. For the short-term, it will be difficult for Huawei to maintain momentum in LATAM. Counterpoint Research’s analyst team has measured the multiple impacts of the ban in LATAM and other regions, as well as other Huawei business units.  This analysis is available to all subscribing clients.

 

Tapping the Vast Opportunity of Smart Cities in LATAM

In LATAM, governments are the biggest contractor of projects. Between 2013 and 2016, public investment represented around 4% of the region’s total GDP or roughly US$213 billion, according to the World Bank. Nearly 40% of all public investment in the region is a public-private partnership. Building up of urban infrastructure attracted most of these investments. Unfortunately, these projects are often inefficient due to weak planning. As a result, governments are turning to technology with the hope of making their investments work by making projects more efficient.

A few days ago, I had the opportunity to participate in the 2nd edition of the SmartCity Expo in Buenos Aires, Argentina. It was one of the biggest smart city events in Latin America.  Companies were promoting their services to the cities, while the cities were showcasing how they have evolved. It was a platform for the meeting of the public sector and the private sector. The key themes that emerged out of the event were – digital transformation, security, mobility, education, sustainable future, inclusiveness, and shared economy.

In the last three to four years, a bulk of the public investment in technology has been for digitalizing all processes. National and capital cities’ governments, especially, have spent a good deal of resources to improve their e-readiness. In Brazil, for example, Congress has approved a US$87 billion budget for 2019 to continue with its digital transformation goal.

E-Government index measures the government use of electronic communications devices such as computers and the Internet to provide public services. Exhibit 1 shows the list of ten most e-ready countries in LATAM.

 

Exhibit 1: LATAM Top Ten E-Government Development Index (EGDI)

Source: UN E-Government Knowledgebase.

However, even within the top ten countries, cities other than national capitals are far from being e-ready.  For example, Colombia has more than 1,200 municipalities, Argentina has 2,300, Brazil has 5,500, and only the top 5% of the cities in these countries have an online appointment system.  Many small cities, located wealthy parts of countries, are looking to improve their e-readiness. Nonetheless, even cities that started digitizing their data many years ago need intelligence to sort the data. They also could benefit from the use of blockchain technology to crossover data.

Another focus area at the SmartCity Expo was improving city security.  Big cities, such as Buenos Aires, Rio de Janeiro, and Sao Paulo, struggle in this regard. As security is an issue that city dwellers most demand, most governments have been installing cameras all over the cities. For example, Buenos Aires, had 8,500 security cameras by the end of May 2018, while Rio de Janeiro had 4,200 in 2017.  The cameras in Rio de Janeiro have been collecting information since 2003 and generate a few terabytes of data every month. Therefore, authorities in Rio de Janeiro are looking for new cloud services to manage and store this data. The city of Rio also needs AI to identify what is normal and what is an anomaly. In the case of Argentina, the coast guard generates 12,000 records each quarter. This year, it contracted Big Data Analytics services to process the data.

Mobility is another area where all major capital cities in LATAM had invested heavily to transform the physical infrastructure. However, there is still a need for major technology investment. For example, the city of Buenos Aires has 6 million people that commute within the city daily. However, it doesn’t have a platform or any information that would convey all the bus or train schedule.  To correct this situation, Buenos Aires is planning to launch an app that would inform commuters about the timings of public transport. Although, in the beginning, the coverage of the app will be limited. At present only six cities in LATAM have this service. With almost 60% smartphone penetration, soon all the other cities will have to provide such a service.

These are just a few samples of why there is such a hype about smart cities in LATAM. On average, each of these contracts is worth US$1.5 million.  As for opportunities, it is clear that “technology is global”. However, technology needs to be supported by a robust business model. And for this the biggest problem for any company are the LATAM governments in most countries, the contract process is often not transparent, always extremely bureaucratic, and many times tainted with corruption. These are the challenges which need resolution if the smart city opportunity in LATAM is to truly flourish.

LATAM Smartphone Market Reached Highest Ever ASP in 2Q18

Growth during the quarter was led by OEMs’ aggressive sell-in.

   New Delhi, Hong Kong, Seoul, London, Beijing, San Diego, Buenos Aires –August 21st, 2018

According to the latest research from Counterpoint’s Market Monitor service, in Q2 2018 the LATAM smartphone shipments grew 2% YoY in volume and 8% in value. Chile and Mexico were the markets that led the growth, driven in part by Huawei and Motorola.

Commenting on the findings Senior Analyst, Tina Lu, said, “LATAM’s smartphone sell-in grew a marginal 2%, despite the economic volatility created by political turbulence. Motorola and Huawei led the volume growth with high double-digit growth, benefiting from the aggressive launch of new products in the mid-range (USD $100-$250) segment.”

Adding further, Tina said, “Consumers in Latin America are slowing down in their replacement rate but investing more money per purchase. Despite the multiple devaluations that most LATAM currencies have experienced during Q2 2018, the smartphone average selling price (ASP) reached USD187, around an 8% YoY increase.  This was the region’s highest ASP ever. LATAM device prices are highly sensitive to currency fluctuations, as most of the countries in the region import devices, and those that require local manufacturing, still depend highly on sourcing parts internationally. Price band growth has been polarizing at both ends of the price spectrum.”

 Exhibit 1: LATAM Smartphone Shipment Share by Brands

LATAM Smartphone Shipments (% Share)

Source: Counterpoint Research: Quarterly Market Monitor Q2 2018

Commenting on the region’s brand evolution, Research Analyst, Parv Sharma, said, “Consumers in the LATAM region need to trust the brand before adopting it. So, this leads to quite a concentrated market with the top five brands, representing almost three-quarters of all the smartphones shipped. These brands have all invested a great deal of resources both in terms of money and management time, within the region, to earn local consumer trust. Huawei enjoyed a 43% YoY growth, the biggest surge among the top five brands. Its success is a result of the company consistently building brand awareness in the region. It has also increased its presence in America Movil. But the channel is quite stacked with Huawei inventory.  Motorola also had double digit volume increase, but its volume growth was leveraged by the C series which took a toll on its ASP.”

 Exhibit 2: LATAM ASP evolution: Q2 2017 vs Q2 2018

LATAM Smartphone ASP Growth by Key Brands
Source: Counterpoint Research: Quarterly Market Monitor Q2 2018

 Market Summary:

  • Samsung captured more than 36% of the LATAM market. It was, once again, the absolute leader in the market, but it lost share YoY.
  • Despite the decline in share, Samsung had a 25% increase in ASP, thanks to increasing midrange sales.
  • Motorola reached 12.4% market share. The refreshed models in the E and G series have increased Motorola’s overall sell-in volumes. However, its Moto C is still the best-selling model and this success affected its ASP, driving it to decline 33% YoY.
  • Huawei reached 11.8% market share. It was third in the market, but just 0.8pp behind Motorola.
  • Huawei’s ASP increased 32% YoY. It is the brand with the highest growth amongst the top selling brands.
  • LG had the biggest YoY drop; a decline of more than 26%. It is the only brand in the top five chart that had flat YoY movement on ASP.
  • Apple remained almost flat with 4% market share, though it had more than 10% growth in ASP.
  • Apple’s ASP growth was driven by the launch of iPhone X which was offset by strong sales of iPhone 6 in the region.

The comprehensive and in-depth Q2 2018 Market Monitor is available for subscribing clients. Please feel free to contact us at press@counterpointresearch.com for further questions regarding our in-depth latest research, insights or press enquiries.

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.

Analyst Contacts:

Tina Lu
+54 91160411221
tina@counterpointresearch.com

 

Parv Sharma
+91 974-259-6030
parv@counterpointresearch.com

 

Peter Richardson
+44 791-723-1934
peter@counterpointresearch.com

 

Follow Counterpoint Research
press(at)counterpointresearch.com

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