As the COVID-19 outbreak continues in several countries across the globe, working from home and distance learning from home has become the new normal. Having stable and reliable internet connectivity beyond smartphones has become a top priority. As a result, a lot of pent-up demand for broadband is coming from both developed and emerging markets. With fiber and other fixed wired broadband connectivity being elusive for many consumers, Fixed Wireless Access (FWA) is turning out to be a viable alternative.
FWA technology has been around for quite some time now if you remember LTE and WiMAX. However, these technologies have complexities involved with laying the cables and fiber to offer last-mile connectivity. These technologies also failed to offer stable internet speeds as wired line broadband. But that changes with 5G.
Fixed wireless access (FWA) is emerging as one of the leading use cases for 5G New Radio (NR) architecture, something that we recently highlighted in our report. We at Counterpoint expect that the global consumer 5G FWA will reach more than 50 million connections in 2025 and increase to more than 450 million in 2030.
In the latest episode of ‘The Counterpoint Podcast’, host Maurice Klaehne and senior analyst Tina Lu are joined by Shiv Putcha, founder and principal analyst at Mandala Insights to talk about FWA. The topic of the discussion covers primary drivers for FWA momentum, current deployment status and challenges. We also offer an insight onto the outlook of Fixed Wireless Access for the next 10 years.
Detailed analysis on FWA momentum, adoption, opportunities, ecosystem growth, and the outlook is available for licensing here.
Telefonica announced at the end of January of 2019 that it sold its Guatemala and El Salvador mobile business to America Movil-Claro (AMX) for a combined sum of US$ 646 million. America Movil will pay US$ 333 million for the Guatemala business and US$315 million for the El Salvador operations. While the Guatemala transaction is a done deal, the El Salvador sale is still subject to regulatory approval.
But why did Telefonica exit a country like Guatemala, the largest market in Central America with a population of 17 million and 20 million mobile connections? Well, the answer lies in the new group strategy of Telefonica where it seeks to improve the return on capital with new strategic positioning.
The strategy started to take shape ever since José María Álvarez-Pallete López, took charge as the CEO of Telefonica in 2016. Lopez, who was earlier the CFO, has a strong financial background being an economist. At the beginning of 2018, he made it clear that the company will do everything to “bring growth and profitability”.
Except for Panama, Telefonica has been struggling across Central America. We expect the company to exit other markets in Central America: Costa Rica, Nicaragua and finally Panama. Telefonica might even let go of Mexico, where the company has struggled since it entered the market in 2000. Despite heavy investment, Telefonica’s subscriber base has remained over 90% prepaid. Like Guatemala, Mexico has struggled to deliver profits for Telefonica.
Over the past two years, Telefonica has systematically decreased its portfolio, sales and inventory of mobile handsets across all its markets. It’s subsidiary Movistar has started to offer a wide range of refurbished mobile devices in Argentina and Chile. Movistar may also start offering refurb devices in Peru and Brazil.
Overall, Telefonica is focusing less on traditional mobile services revenue income, such as selling devices and instead switching attention to offer new services. Recently, it launched IPTV in Brazil and Argentina for which it’s accelerating FTTH deployment in both countries.
Meanwhile, Telefonica’s exit from Guatemala and El Salvador also reinforces AMX’s long-term strategy. The Mexican operator is always seeking a dominant position either by acquisition, organic growth or a mix of both. As Telefonica is selling, AMX will most likely to continue with its shopping spree.
By purchasing Telefonica’s business in Guatemala, AMX will gain infrastructure, spectrum and other licenses that will help it surpass Tigo (Millicom).
Claro (AMX) Guatemala Will Reach 46% Share of Subscriptions After Purchasing Movistar
Source: Counterpoint Market Monitor 2018
So far, Guatemala has had three carriers. Tigo is the absolute leader with more than half the subscriptions. Claro (AMX) is second while Movistar (Telefonica) is the smallest with around 19% market share. After the acquisition of Telefonica’s business, Claro’s share will jump to 46% and though it will remain behind Tigo, it will close the gap significantly. Postpaid accounts are 4.8% of Movistar’s subscription base in Guatemala, this percentage is much smaller than the countries’ average of 6.6%.
Claro El Salvador Will Lead this market after acquiring Movistar
El Salvador Mobile Subscription Share of Market
Source: Counterpoint Market Monitor 2018
Meanwhile, in El Salvador, Claro will become the dominant player with a subscription share of more than 54%. Therefore, the deal is still awaiting regulatory approval. El Salvador is a much smaller market than Guatemala. It has a population of 6.4 million people and 11 million connections. However, there are five carriers operating in the market. It was the latest country in LATAM to launch LTE. Top three carriers are, Tigo (33% share), Claro (31% share), and Movistar (24% share).
By the end of 2018, the subscriber base for 4G-LTE had surpassed 3G in LATAM. Although 4G subscriptions surpassed the 3G subscriptions by only 5M subs, this scale will continue to tilt towards 4G-LTE until 5G comes around. 4G-LTE smartphone sales surpassed those of 3G smartphones by the end of 2015, however, it took three years for LTE to become LATAM’s leading technology in terms of subscribers.
Exhibit 1: LATAM Subscription Share by Technology
Source: Counterpoint Market Monitor 2018
Chile and Brazil lead the 4G-LTE penetration with more than 50% of their subscriptions. Colombia and Peru both have 4G-LTE penetration below 30% and will likely have the highest growth amongst major LATAM countries during 2019 and beyond. All Central American countries also offer ample growth opportunities in LTE technology. El Salvador was one of the countries to launch 4G-LTE most recently. It launched its 4G-LTE network at the end of 2016. By the end of 2018, its LTE subscription penetration remained below 13%.
Exhibit 2: 4G-LTE Penetration and Growth (2018)
Source: Counterpoint Market Monitor 2018
2G has shrunk to represent around 20% of the subscriber base. Brazil and Mexico have the lowest 2G participation, while Central America countries and Peru have the highest. However, in Colombia, Claro (AMX) expanded its 2G network at the beginning of 2018 mainly to serve the bottom of the pyramid users that can’t afford a smartphone device and smartphone data plan.
A few carriers in the region are considering shutting their 2G networks off so they can reuse the spectrum for 4G-LTE. This is to respond to the exponential growth of data demands or potential demands of 5G. AT&T Mexico has already announced that it aims to shut down its 2G network starting April 2019. This task might not be that easy as AT&T will have to clean the frequency before it is usable to build a new network. This means not only moving 2G mobile users to 4G technology, but also those 2G M2M devices, which could complicate the shutdown.
LATAM has a population of 650M but more than 710M subscriptions. With 430 unique subscribers, there is an average of 1.68 SIM cards per user. In many countries regulators and operators have been pushing to decrease the number of lines. There are more subscriptions than people due to many reasons, but the main reason is because many users have more than one mobile line and multiple devices.
As 4G-LTE is already the dominant technology–now what is next? Currently, 18 carriers in the region have already launched VoLTE (voice over LTE), and at least 21 more have already announced their plans to launch it. Additionally, AT&T announced the launch of its LTE-M network in Mexico and TIM Brazil announced the launch of an NB-IoT network. In both cases, they will soon be offered commercially.
Many operators have also announced 5G trials and testing. Brazil regulator, ANATEL, announced that it will be auctioned 5G frequency by the end of 2019. However, as we learnt from 4G, it might take at least two years between the auctioning of the frequency and the commercial launch of the technology. 5G frequencies most likely will have to be cleaned before it can be used, so it will take some time. Many LATAM carriers, megacarrier or small, have said publicly that they need to work on recovering the investment of LTE technology before they can move to the large investments of 5G. LTE technology is now at the top of the wave, in LATAM, to prepare the region for the 5G wave that will unload full starting 2024.
Argentina smartphones sales grew 59% annually in Q3 2017, and 22% compared to the previous quarter. The top 3 brands represent more than 87% of the market, with more than 35 other brands disputing the remaining 8%. Furthermore, the top 5 models alone represent almost 45% of the market.
Argentina is an extremely closed market. Imports of mobile devices are allowed only with special authorization. Less than 3% of all the mobile devices sold between January and September, were imported as imported devices are subject to greater than 110% duties. Most devices are assembled in the Tierra del Fuego region. This confers a high assembly cost, but still less than import duties. The consequence of the high production costs is that Argentinean consumers have to pay, on average, as much as double the price compared to Chile and USA, for similar models.
The current government intends to slowly open the market and decrease taxes on imported mobile devices in moves similar to that of the personal computer category. However, the government has not yet set the timeframe to incentive mobile devices purchasing by allowing imports and lowering the category taxes.
Strong Macroeconomic Conditions Drive Growth – but also of illegal imports.
Despite the high prices, the improving macroeconomic conditions in the country have led to 59% YoY total market growth, and almost 22% QoQ growth. We forecast that Argentina will finish 2017 with approximately 11.5M units sold. This is still around 3 million units below the current total addressable market (TAM). Since 2014 more than 2 million mobile devices enter the country illegally each year. Most of these come from neighboring countries, such as Chile, Paraguay and Uruguay. The government has recently announced that it will implement a mechanism to block mobile devices that were not assembled in the country or were imported illegally into Argentina. This process would be difficult to implement, but the government is signaling that it will try to control organized smugglers selling large quantities of illegally imported mobile devices.
Samsung Leads
Samsung has been the absolute leader of the Argentine market. It has refined its production process with assemblers in TdF. And its consistent brand building and marketing execution has given it a strong competitive advantage. Samsung is the only brand that has branded stores in the country, with four stores strategically located around Buenos Aires. It recently opened more points of sale in a smaller kiosk format, dedicated to selling accessories. Samsung also has a sizeable team of trade representatives that are present in almost all provinces.
After being absent for more than five years, Apple has recently re-entered the Argentine market. It currently has less than 1% share. This is because iPhones cost more than twice as much as they do in the US. An unlocked iPhone 7 32GB currently costs around USD$1400 in Argentina. More than half of this cost is taxes and distribution costs. Claro is the only operator offering iPhones, together with a few retailers.
Exhibit 1: Argentina Smartphone Shipments Ranking and Market Share – Q3 2017
Q3 2017 had almost 59% YoY growth and almost 22% QoQ growth.
Smartphone penetration reached 99% of Q3 2017 sales.
LTE devices grew 74% YoY and 23% QoQ.
99% of the market are LTE-enabled devices.
At the end of Q3 2017, there was some inventory building in the channel, as the market was preparing for Mother’s day, which, in Argentina, is in October.
More than one out of every two devices sold in Argentina is a Samsung. Although its sales volume grew more than 26% in Q3 2017 annually, it lost more than 10% in market share compared to Q3 2016.
LG has been Samsung’s biggest competitor. Its share increased only marginally, by 1% YoY, but its sales volume increased more than 71% annually. Its K series smartphones were very competitive, which helped the brand to grow above the market rate. But it is facing tough competition from both Samsung and Motorola.
Motorola grew its smartphone volume by 254% YoY. It more than doubled its volume share reaching 13.9%. The launch of its C series has allowed the brand to compete head to head with Samsung’s lower J series.
Huawei grew its share slightly compared to last year. Huawei has successfully built its brand in Argentina over the last year. However, local assembly requirement, forces it to have a limited portfolio, compared to its offerings Mexico or Colombia; this has been a roadblock for the brand’s growth.
Alcatel also more than doubled its share and volume sales, compared to 3Q16. It has been facing difficulty in getting enough product and has lacked investment in its brand.
Exhibit 2: Argentina Bestselling Smartphone Rankings – Q3 2017
The top 10 smartphone models represent more than 66% of Q3 2017 sales in Argentina.
Samsung had 5 out of the top 10 models.
Samsung’s Galaxy J2 Prime is the best-selling model as it has enjoyed a special push from operators.
All but one of these models are from the sub-US$200 price bands.
Samsung’s Galaxy J7 is the highest price model from all the top 10. An average sell in price of $161. While J1 mini prime is the least expensive model from the list.
LG has 3 out of the top 10 models. All from the K series.
Motorola has the remaining models. Both of these models prices are intended to compete with Samsung’s lower order J series.
Except for Samsung Galaxy J1 Ace VE and J1 Mini, all the models have screen size above 5”.
Top five smartphones brands account for more than 92% of the smartphone sales in 3Q 2017
Buenos Aires, San Diego, New Delhi, Hong Kong, Seoul, Beijing – November 29th, 2017
According to the latest research from Counterpoint’s Market Monitor service, Argentina smartphones sales grew 59% annually in Q3 2017, and 22% compared to the previous quarter.
The top 5 brands represent more than 92% of the market, with more than 35 other brands disputing the remaining 8%. Furthermore, the top 5 models alone represent almost 45% of the market.
Commenting on the 3rd Quarter findings, Tina Lu, Senior Analyst at Counterpoint Research said, “Argentina is an extremely closed market. Imports of mobile devices are allowed only with special authorization. Less than 3% of all the mobile devices sold between January and September, were imported as imported devices are subject to greater than 110% duties. Most devices are assembled in the Tierra del Fuego region. This confers a high assembly cost, but still less than import duties. The consequence of the high production costs is that Argentinean consumers have to pay, on average, as much as double the price compared to Chile and USA, for similar models”.
Further commenting on the regulatory changes, Tina Lu added, “The current government intends to slowly open the market and decrease taxes on imported mobile devices in moves similar to that of the personal computer category. However, the government has not yet set the timeframe to incentive mobile devices purchasing by allowing imports and lowering the category taxes”.
Speaking about market performance, Tina Lu noted: “despite the high prices, the improving macroeconomic conditions in the country have led to 59% YoY total market growth, and almost 22% QoQ growth. We forecast that Argentina will finish 2017 with approximately 11.5M units sold. This is still around 3 million units below the current total addressable market (TAM). Since 2014 more than 2 million mobile devices enter the country illegally each year. Most of these come from neighboring countries, such as Chile, Paraguay and Uruguay. The government has recently announced that it will implement a mechanism to block mobile devices that were not assembled in the country or were imported illegally into Argentina. This process would be difficult to implement, but the government is signaling that it will try to control organized smugglers selling large quantities of illegally imported mobile devices”.
Highlighting on brand performance, Parv Sharma, Research Associate, said, “Samsung has been the absolute leader of the Argentine market. It has refined its production process with assemblers in TdF. And its consistent brand building and marketing execution has given it a strong competitive advantage. Samsung is the only brand that has branded stores in the country, with four stores strategically located around Buenos Aires. It recently opened more points of sale in a smaller kiosk format, dedicated to selling accessories. Samsung also has a sizeable team of trade representatives that are present in almost all provinces”.
Commenting further about brand performance, Parv Sharma noted “After being absent for more than five years, Apple has recently re-entered the Argentine market. It currently has less than 1% share. This is because iPhones cost more than twice as much as they do in the US. An unlocked iPhone 7 32GB currently costs around USD$1400 in Argentina. More than half of this cost is taxes and distribution costs. Claro is the only operator offering iPhones, together with a few retailers”.
Exhibit 1: Argentina Smartphone Shipments Ranking and Market Share – Q3 2017
Q3 2017 had almost 59% YoY growth and almost 22% QoQ growth.
Smartphone penetration reached 99% of Q3 2017 sales.
LTE devices grew 74% YoY and 23% QoQ.
99% of the market are LTE-enabled devices.
At the end of Q3 2017, there was some inventory building in the channel, as the market was preparing for Mother’s day, which, in Argentina, is in October.
More than one out of every two devices sold in Argentina is a Samsung. Although its sales volume grew more than 26% in Q3 2017 annually, it lost more than 10% in market share compared to Q3 2016.
LG has been Samsung’s biggest competitor. Its share increased only marginally, by 1% YoY, but its sales volume increased more than 71% annually. Its K series smartphones were very competitive, which helped the brand to grow above the market rate. But it is facing tough competition from both Samsung and Motorola.
Motorola grew its smartphone volume by 254% YoY. It more than doubled its volume share reaching 13.9%. The launch of its C series has allowed the brand to compete head to head with Samsung’s lower J series.
Huawei grew its share slightly compared to last year. Huawei has successfully built its brand in Argentina over the last year. However, local assembly requirement, forces it to have a limited portfolio, compared to its offerings Mexico or Colombia; this has been a roadblock for the brand’s growth.
Alcatel also more than doubled its share and volume sales, compared to 3Q16. It has been facing difficulty in getting enough product and has lacked investment in its brand.
Exhibit 2: Argentina Bestselling Smartphone Rankings – Q3 2017
The top 10 smartphone models represent more than 66% of Q3 2017 sales in Argentina.
Samsung had 5 out of the top 10 models.
Samsung’s Galaxy J2 Prime is the best-selling model as it has enjoyed a special push from operators.
All but one of these models are from the sub-US$200 price bands.
Samsung’s Galaxy J7 is the highest price model from all the top 10. An average sell in price of $190. While J1 mini prime is the least expensive model from the list.
LG has 3 out of the top 10 models. All from the K series.
Motorola has the remaining models. Both of these models prices are intended to compete with Samsung’s lower order J series.
Except for Samsung Galaxy J1 Ace VE and J1 Mini, all the models have screen size above 5”.
Please feel free to contact us at press@counterpointresearch.com for further questions regarding our in-depth latest research, insights or press enquiries.
Apple captured a record share of the important premium segment widening the gap with Samsung by more than 50%.
According to the latest research from Counterpoint’s Monthly Market Pulse for December 2016 report which tracks the global smartphone sell-through performance via channel survey, the smartphone sell-through volumes crossed a record 150 million units globally in December and 1.5 billion units for the full year 2016.
Commenting on the findings, Jeff Fieldhack, Research Director at Counterpoint Research said, “During the first eight months of 2016, Apple saw its smartphone market share remain at a record low compared to the last few years. However, the iPhone 7 series launch has been able to offset most of the previous decline. The iPhone 7 series demand was healthy through the holiday period, especially in markets such as USA, Western Europe and Japan somewhat offsetting a softer than expected performance in China. Apple surpassed Samsung in December 2016 capturing a 19% share of the global smartphone sell-through volumes.
Furthermore, Apple’s share of the $400+ segment crossed the 70% mark in December 2016 from a low point of 47% in May 2016, which is commendable considering the premium segment growth has been flat annually. A healthy sell-through of iPhones in the channel points toward a strong holiday quarter from a shipments perspective and strong wholesale ASP as the mix shifted towards higher capacity and larger screen iPhone models. In markets, such as the USA, Apple’s share in the premium segment has reached close to a record 80% in this peak season.”
Source: Counterpoint Research: Monthly Market Pulse Dec 2016
Peter Richardson, Research Director at Counterpoint Research added, “Apple and Samsung’s share shifts in the premium segment (US$400+ wholesale) have been always been almost a zero-sum game, but the gap has widened to more than 50 percentage point difference. Part of the reason being the absence of Galaxy Note 7 and rising competition from rivals’ flagships such as Huawei Mate 8, Google Pixel and Moto Z in some markets. While Galaxy S7 series sales have been strong, they’ve not been strong enough to fill the void left by the Galaxy Note 7. It will be a testing time for Samsung with the upcoming flagship Galaxy S8 to claw back share and then maintain it until the next version of the Note is launched.”
Source: Counterpoint Research: Monthly Market Pulse Dec 2016
Tina Lu, Senior Analyst at Counterpoint Research added, “Huawei has been the rising star and December 2016 was also the first-time Huawei crossed the 10% share mark globally. Huawei has also for the first-time been on par with Apple in terms of sell-through volumes in couple of months during 2016. This is a significant feat for the Chinese brand. Huawei aims to surpass Apple in volumes during 2017. However, performance in North America and key Asian markets will be the key. If it can build on its strong position in Europe, Latin America and Middle East Africa, then it has a chance to accomplish this milestone.”
While overall smartphone demand remained flat compared to last year, 4G LTE smartphone demand across UK, Germany and France jumped significantly.
London, Hong Kong, Seoul, New Delhi, Beijing, San Diego, Buenos Aires –
Sept 7th 2016
According to the latest research from Counterpoint’s Market Monitor service, smartphone shipments in the second quarter of 2016 in Western Europe declined 1% YoY and 8% sequentially. However the largest five countries grew 4% YoY but declined 6% sequentially.
Peter Richardson, Research Director at Counterpoint, commenting on Q2 2016 market and vendor performance said, “The overall smartphone demand remained soft during the quarter with upticks in demand in Italy (+8% YoY), France (+9% YoY) and UK (+4% YoY) offset by slowdowns in Spain, Germany and other smaller countries across Western Europe. However, 4G LTE smartphone demand grew a substantial 76% YoY, as most brands transitioned to an all LTE portfolio and operators continued to push LTE smartphone bundles across the region. The UK was the biggest market for LTE smartphone shipments during the quarter, followed by France and Germany. The UK also continues to drive the highest LTE subscription number in the region, reaching 40 million subscriptions at the end of Q2, led by the operator EE with a 41% share in the UK. The wave of LTE smartphone subscriber growth and the Q4 holiday season will drive the overall demand higher across Western Europe in the second half of this year”.
Tarun Pathak, Senior Analyst at Counterpoint Research, commented further, “Western Europe continues to be a market of strategic importance for many brands, not only from a volume perspective but also value perspective as it is one of the higher ASP markets in the world. As the smartphone market becomes increasingly saturated and growth is more and more driven by replacement demand, the mid-range to premium segment is going to be even more competitive in coming quarters. The brands with strong marketing campaigns, better product quality, and strong channel and operator partnerships will cement their position in the second half. Huawei and Apple should register positive growth in the second half of 2016, likely at the expense of Samsung and other Android brands such as LG, Sony, HTC and others. Aggressive Asian brands such as Oppo,Vivo, LeEco and Xiaomi remain elusive in Europe, the challenge is coming more from home-grown brands such as Wiko and BQ. However their share remains limited across the region as a whole.”
Market Summary:
Almost nine out of every ten mobile phones shipped in Western Europe were smartphones
Chinese brands contributed to almost a fifth of the overall smartphone shipments.
One in five smartphones are sold through online channels.
Almost nine out of every ten smartphones shipped in Western Europe were LTE capable.
Top five markets contribute to almost 78% of the total smartphone market.
Exhibit 1: Western Europe Smartphone Shipments Contribution by Top 5 Countries
Source: Counterpoint Research Market Monitor Q2 2016
Vendor Summary:
Samsung led the smartphone market during the quarter contributing a third of the total smartphone shipments in Western Europe driven by strong sales of its ‘A’ and ‘J’ series and flagship ‘S’ series.
Samsung S7 series was among the Top Five bestselling models in each of the Top 5 countries.
Apple maintained the second place with 21% market share in the region as shipments grew 5% YoY but were down 27% QoQ.
Huawei was the third largest brand in the region with a market share of 11% with strong performance in markets such as Italy, Spain, Netherlands and the Nordics.
Huawei shipments grew 30% YoY in the region driven mostly by strong demand of mid to high end smartphones
Western Europe was one of the strongest markets for Huawei as it expands its distribution backed by a strong marketing campaign featuring Hollywood stars as brand ambassadors
LG was ranked fourth in the region with a market share of 5% in the quarter driven by its K series. However, the recent flagship G5 failed to provide a much needed push in the premium segment.
Wiko continues to be among Top 5 smartphone brands with a market share of 3% driven by a strong performance in the big markets like France, Italy, Spain and UK.
Wiko was the third largest brand in France during the quarter as it remains popular in entry to mid smartphone segment.
Exhibit 2: Western Europe Smartphone Shipments 2Q 2016
Source: Counterpoint Research Market Monitor Q2 2016
The comprehensive and in-depth Q2 2016 Market Monitor is available for subscribing clients (here). Please feel free to contact us at analyst@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.
According to the latest Market Monitor Report from Counterpoint Research, the overall mobile phone market in Peru shrank by 24% YoY, but the smartphone segment grew a healthy 21% YoY as smartphone penetration continues to grow in the total Latin American (LATAM) market.
Commenting on the findings, Peter Richardson, Director at Counterpoint Research said, “Mobile operators dominate the Peruvian market. Open channels account for only 7% of the market; operators subsidize mobile handsets as they compete to increase market share. Entel reintroduced subsidies when it entered the Peruvian market at the end of 2014. Entel brought balance to the operator ecosystem and also advanced technology; Entel has the highest smartphone penetration among the operators. More than half of all the devices sold in Peru were 4G enabled devices. However the feature phone segment still accounts for about 30% of the market.”
Tina Lu, Senior Analyst at Counterpoint Research added, “Peru is a unique and highly competitive market, with no absolute winner. None of the brands, except Nokia, has achieved more than 20% market share in any quarter for the past three years. Alcatel, BMobile and Samsung have been top performers, alternating the top spot during last two years. This is the first quarter that Huawei is among the top three performers; its share more than doubling year over year. It has done this by offering the most affordable 4G large screen smartphone (or phablet) in the market.”
Ms Lu, commenting on operator channel performance, notes, “Movistar has been leading the sales of mobile phones in both volume and value in Peru. Movistar has also been the leader among the operators. Claro is the second biggest operator in Peru, but has been losing subscription share to Entel’s strong 4G network and aggressive offering. Entel was the latest entrant to the market but it has the best geographic coverage among the 4G networks, which gave it a competitive advantage over Claro and even Movistar.”
Market Summary:
The Peruvian mobile phone market shrank by 24% YoY, but smartphone segment grew 21% YoY.
Smartphones represented more than 70% of total mobile phone sales across all channels, except in Claro.
Entel led smartphone penetration with more than 89% share of operator sales.
LTE accounted for around 54% of all the mobile phones sold in the quarter.
The US$ 0-50 wholesale price band was the most important segment contributing almost 69% of all mobile phones shipped in the quarter.
Exhibit 1: Peruvian Mobile Phone Manufacturer Share in Q1 2016
Vendor Summary:
Alcatel led the mobile phone market with 17% share, up from 12.5% a year ago. It is also the largest feature phone supplier in the Peruvian market.
Huawei also had the highest YoY share growth in volume. It more than doubled its share in one year. Its bestselling mobile devices models were the Huawei Y635, an entry level, 4G, phablet and the Huawei P8 Lite smartphone.
Samsung was second in volume and value share in Peru, and it had an impressive 80% YoY growth. The Galaxy J5 and Galaxy J7 were the best-selling models during the quarter.
Channel Summary:
Alcatel One Touch dominated Movistar and Entel, and it was the second leading brand in Bittel
Samsung was the leading brand in the open channel and the second largest brand in Claro.
Azumi was the leading brand in Claro.
The open channel was led by Samsung, followed by a regional brand Verykool.
Bitel was the leading brand in others, followed by Alcatel.
Exhibit 2: Peruvian Mobile Phone OEM Ranking by Channel in Q1 2016
The comprehensive and in-depth Q1 2016 Market Monitor is available for subscribing clients. Please feel free to contact us at analyst@counterpointresearch.com for further enquiries regarding our latest research, insights or press enquiries.
Methodology
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.
Counterpoint Research’s team of Analysts have completed preliminary sizing of the global handset and smartphone market as few OEMs have already released their Q4 2015 (Oct-Dec) performances. The following are our preliminary market share estimates and rankings according to our quarterly Market Monitor service.
Overall Market :
Smartphone shipments reached 418million units (+9% YoY) in holiday season quarter of 2015 and a massive 1475 million units for full year 2015(+12% YoY).
3 in 5 smartphones shipped in 2015 were LTEcapable i.e. 900 million LTE smartphones were shipped globally in 2015, a breakout year for the mobile industry.
3 in 5 smartphones shipped in premium segment (>$400) in 2015 were iPhones.
Close to 850 brands are competing in the smartphone market, however the top 20 commands almost 85% of the total smartphone shipments in 2015.
The entry level and premium smartphone segments combined contributed to more than half of the total shipments in CY 2015.
Local brands especially from China and India showed promising growth in smartphone shipments.
While local brands targeted first time smartphone buyers through aggressive pricing and targeted go-to-market strategies, Chinese brands moved beyond domestic boundaries in pursuit of growth as the China smartphone market saturates.
Oppo & Vivo were the star performers followed by Huawei & Apple among the top ten smartphone brands globally
Meizu, Lava, Intex, Asus, Tecno were other brands with growth rate above 100%, gaining prominence and moving up the smartphone rankings.
Vendor Highlights:
Samsung
Samsung shipped 81.5 million smartphones with a sequential decline of 3% and YoY increase of 10%.
The overall smartphone shipments were driven by emerging countries such as India, South East Asian markets including Indonesia and Vietnam, and LATAM countries including Brazil and Mexico.
However it continues to lose market share in key mature markets, in some emerging markets – to local brands – and to Apple in the premium segment.
Samsung’s J series continues to drive volumes for Korean giant as it ramped up the series by launching multiple SKUs in the entry to mid-level segment. It used its distribution prowess to gain much needed foothold in the $100-$200 segment where it is facing stiff competition from local and Chinese brands.
During the quarter, the demand for its mid level A series was soft, mainly driven by models like A7, A5. It was unable to arrest the decline of its E series and other mid level smartphones.
In the premium segment, the Galaxy Note series, especially Note 5, was the lone challenger as demand for its S6 series remained below expectations, in spite of drop in the price of some SKUs.
Apple
Calendar Q4 2015 was the best ever iPhone quarter for Apple, as it registered the highest ever iPhone shipments, revenues and ASP. iPhone shipments peaked at 74.8 Mn during the quarter though shipments were flat as compared to YoY.
iPhone continues to be Apple’s linchpin – contributing 66% of the company’s revenues.
According to our quarterly tracker, Apple iPhones continues to capture almost 40% of the smartphone industry hardware revenues.
Apple also crossed an important milestone as the installed base of Apple devices surpassed 1 billion (incl. Macs, iPods, iPhones, iPads, Apple TV & Watch).
2015 was a phenomenal year for Apple’s growth with a major contribution coming from Greater China.
Apple hopes to still continue to grow more in China, wooing the sizeable middle class consumer segment with its aspirational products from iPhone to Apple Watch.
Apple would like to replicate this growth story into other large emerging markets such as India,Indonesia and key markets in Africa.
While 2015 has been a record year for Apple, the most recent quarter also signals why investors and Apple should be concerned as demand has peaked and is projected to slow, signalling much tougher times ahead.
Huawei
Huawei continues to be among top three smartphone brands globally with a smartphone market share of 8% during the quarter.
Huawei’s smartphone shipments increased sequentially by 21.8% and 38% annually reaching 33.4 million units.
Huawei surpassed its annual target of 100 million smartphone shipments in 2015.
North America was the bright spot during the quarter as Huawei showed a QoQ growth of 277% in the region mainly driven by Nexus 6P – although this growth is from a low baseline.
With the success of Nexus 6P in US market Huawei is looking to rebuild its brand value and market position in North America.
Honor brand is yielding results for Huawei with a presence in more than 74 countries around the globe and contributed to more than a third of the shipments.
Honor brand helped Huawei successfully penetrate emerging countries like India with aggressive pricing and the Ascend series continues to do well in Middle East Africa and Europe.
The Chinese vendor also strengthened its market share in flagship segment in 2015 leading to increasing in overall ASP driven by high end Mate and Ascend series.
Xiaomi
While Xiaomi continues to be among top 5 in smartphone segment the Chinese brand missed its revised handset shipment goal of 80 million unit; shipping slightly over 70 million units.
During the Dec ending quarter, Xiaomi shipped 17.8 million smartphones as market share stood at 4%.
With YoY growth of just 2%, Xiaomi was unable to scale in countries beyond China.
The overseas shipments contribution increased to 8% in CY 2015 still much below expectations.
IP issues, lack of differentiation and its inability to to scale the MI ecosystem in countries beyond China were some of the key reasons for the slow down.
Its portfolio strategy for overseas marketing was not robust as it was unable to refresh its product portfolio in key countries like India while launching new models like Redmi Note 2 and Redmi Note 3 in home territory.
Xiaomi is scaling up its offline operations to arrest the slow down but it will come at a cost of profitability and entering newer markets such as S.Korea and potentially USA through open channels.
Lenovo (+Motorola)
Lenovo (+Motorola) smartphone shipments were down 19% annually but grew by 7% sequentially.
Lenovo performance in China remained flat as it was unable to drive volumes. However, Lenovo’s growth outside China – for example in India, Middle East and South Asia, has helped it to surpass Xiaomi during the quarter.
Lenovo K-note series has been very popular in Asia, for example it has been one of the top three selling models in India.
Motorola on the other hand had grew by 11% during the quarter but future outlook for the brand looks bleak as it paves way for parent brands Vibe series in mid segment and restricting itself to higher segment only.
The overall shipments for the entire 2015 declined by 20% YoY mainly due to Lenovo’s performance in China.
LG:
LG smartphone shipments were up by 3% sequentially in Q4’2015.
As a result, smartphone shipment of LG increased from 59.2 million to 59.7 million units in 2015 over 2014.
Its flagship G4 didn’t perform as per expectations and the mid segment faced stiff competition from chinese and local brands.
LG needs to chase volumes in mid segment by lowering ASPs as brand loyalty is slowly fading in that segment. On flagship strategy it need to launch more than one flagships a year and do away with its strategy of mini flagships and launch an entirely new portfolio.
For press comments and enquiries please reach out to analyst (at) counterpointresearch.com
Our Q2-2015 Market Monitor report has been published. We update one infographic in each quarter to summarize handset and smartphone market activities in a single page.The report tracks now more than 75 top vendor shipments every quarter across regions and countries which contribute to almost 90% of the total global smartphone volumes and much more at country level. The global mobile phone industry shipments grew 5% YoY. Middle East Africa was the fastest growing region up grew 7 times faster than global.
One of every five mobile phone shipped globally is a Samsung.
Huawei became the world’s third largest handset surpassing Microsoft.
Asus shipments grew 5X from a year ago to become fastest growing brand , followed by Vivo’s total shipments grew 4X compared to a year ago
Every 3 out of 4 mobile phone shipped on planet is a smartphone.
Excluding Samsung, Apple now generates more smartphone revenues than the all other players combined
One in two smartphones shipped globally now is LTE capable.
US and China together contributed to two-thirds of the LTE smartphone market
LTE Smartphone shipments grew 4X in china and 12x in India annually
Please feel free to reach out to us for press or this research-related questions at: analyst (at) counterpointresearch.com
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