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Insights Tag: Motorola Brazil

Chinese Brands Set to Challenge Samsung in LATAM

Latin America’s smartphone market dynamics have changed significantly in 2020.  Sales plunged in H1 2020 as the COVID-19 pandemic forced closure of stores amid lockdowns. The third quarter not only saw the sales reviving but also a dramatic change in the region’s brand landscape compared to the same period in 2019. In Q3 2020, the share of international brands (includes Samsung, Apple, Nokia, Asus, etc.) increased by 6% YoY at the expense of Chinese and regional brands, with each shedding a 3% share.

Exhibit 1: LATAM Brand Origin Share, Q3 2017 – Q3 2020

 Counterpoint LATAM Brand Origin Share, Q3 2017 – Q3 2020

Source: Counterpoint Research Market Monitor, Q3 2020

Huawei used to be the second best-selling brand in LATAM, but it lost share sharply due to the tightening of the US trade ban. Motorola and Xiaomi took much of this share. But still Samsung alone had more than 45% of the market in Q3 2020. So, both operators and retailers are looking for brands that can challenge Samsung’s dominance in the region.

With all this context, Chinese brands OPPO, realme, vivo and OnePlus have set their sights on LATAM. All these brands are already available in small quantities at a few online marketplaces in the region. But now they are setting up teams and offices in the region. Interestingly, these brands have adopted a ‘divide and conquer’ strategy, with each brand entering a different country, trying not to step on each other’s toes.

realme has already announced its official launch in Colombia, Brazil, Chile and Peru. But so far it has set up offices in Colombia and Chile only. In the case of Brazil, realme is currently selling two models through some marketplaces and has promised their delivery by Christmas. But these models are not yet available through national retail or operator channels.

OPPO has set its foot in Mexico, selling its models through the country’s two major operators – Telcel and AT&T. In the short term, OPPO may not enter any other country in the region.

Meanwhile, vivo is launching in Chile and Colombia. In September, vivo set up an office in Chile after opening one in Colombia in August in the middle of the COVID-19 lockdowns. vivo models are sold through retail channels in Colombia and local operator Entel in Chile as it is an operator dominated market.

It is clear that vivo and OPPO will not compete for market share, while realme will be positioned as the low-cost option.

These are not the only Chinese brands looking to enter the region. Others such as Tecno are also looking to fill the gap left by Huawei. So far, the volume of such brands does not surpass 30,000 in any country in the region and is not expected to increase much in the short term. It takes some time to attain high volumes in this brand conscious region.  Xiaomi, for example, entered LATAM in 2015 but was able to cross the one million mark in quarterly shipments only in 2020.

LATAM Smartphone Market Returned to Growth in Q3 2019

Samsung leads the smartphone market in LATAM with 40% share.

Huawei returns to growth and remains the third-largest smartphone brand.

New Delhi, Hong Kong, Seoul, London, Beijing, San Diego, Buenos Aires – November 21st, 2019

After four consecutive quarters of decline, the LATAM smartphone market registered 3.7% growth year over year (YoY) in Q3 2019, with almost all major markets, except Peru, having some level of shipments growth. In terms of brands, Samsung, Huawei and ZTE registered the most significant growth.

Commenting on the market’s development, Counterpoint Research Senior Analyst, Tina Lu, said, “Aggressive price erosion on older models, and the launch of new models, has tempted LATAM consumers to accelerate the replacement of their smartphones. But market concentration increased, with the top three brands now representing 69%, up from 65% in Q3 2018. This four-percentage point increase in concentration was mainly captured by Samsung, as it had the biggest YoY increase among the top three brands”.

Commenting on brand performance, Tina highlighted, “Samsung continues to strengthen its position in the region, reaching an all-time high of 40% share. Samsung combines aggressive pricing, strong brand awareness and an increasingly powerful sales channel push. Its sell-in growth is the result of the consolidation of its A-series across the region, while maintaining the J-series in Argentina and Brazil; several J-series models were still popular in these markets during Q3 2019.”

Parv Sharma, Research Analyst, added, “Huawei came back swiftly following the trade ban in May that caused sales to slow. It is still some distance from its peak in Q1 2019, but it managed to secure YoY growth in both August and September. Huawei’s focus in both Mexico and Colombia has yielded positive results, as it managed to remain a strong number two in both markets. Sales of legacy products should allow Huawei to stay competitive in LATAM market for rest of this year and in to 2020.”

Exhibit: Smartphone Shipment Market Share 2019 Q3

Source: Counterpoint Research Market Monitor Q3 2019

 Market Summary:

  • Samsung is once again the absolute leader in the LATAM smartphone market. It is the leader in all major LATAM countries, although its leadership position has been closely challenged in Mexico.
  • Motorola has strong brand recognition in LATAM and, when combined with an attractive and affordable portfolio, it makes for a strong number two in the region. Its robust position in Argentina and Brazil provides a strong platform for continued strength in the region, provided it maintains its product portfolio with similar positioning.
  • Motorola’s volume increased compared to the previous quarter and the same quarter last year, as it manages to gain share, partly from LG.
  • Huawei has been aggressive at regaining share in Mexico, followed by Colombia and Chile. However, Huawei has not made much progress in penetrating the Brazilian market as it does not have the requisite local manufacturing capability.
  • LG continues to decline in the region. Nevertheless, it has managed to stay among the top three brands in Brazil and Argentina. These two countries represent almost 78% of its regional volume.
  • ZTE is slowly consolidating its position in the region. Its main market is Mexico, which represents almost half of its volume in the region. ZTE sells almost exclusively through operator channels, and mainly in AMX (America Movil).
  • TCL is attempting a dual brand strategy. Its Alcatel brand has a long history in the region, and it is pushing for growth again. In addition, it is now offering TCL-branded smartphones as a more premium offering.
  • Apple lost share and volume YoY, but it maintained share of the installed base. LATAM consumers must pay a hefty premium for iPhones of between 50% and 100% more, compared to US prices. Therefore, many Apple users choose to purchase new Apple devices in the US and then hand-carry to regional markets.
  • Local Kings’ and smaller brands’ shipments continue to decline, mainly displaced by Huawei and Motorola. Regional brands are mainly competing in the feature phone and low-end 3G smartphones segments.

The comprehensive and in-depth Q3 2019 Market Monitor is available for subscribing clients. Please feel free to contact us at press(at)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.

You can also visit our Data Section (updated quarterly) to view smartphone market share Globally and from the USA, China and India.

Analyst Contacts:

Tina Lu

Parv Sharma

Peter Richardson

Follow Counterpoint Research
press(at)counterpointresearch.com

LATAM Smartphone Market Falls YoY For The Fourth Consecutive Quarter in Q2 2019

Samsung is the top smartphone brand in the LATAM market with 42.3% share.

Motorola ships more than Huawei to become the second-largest smartphone brand once again.

Samsung, Motorola, and Huawei together have 71% market share.

New Delhi, Hong Kong, Seoul, London, Beijing, San Diego, Buenos Aires – August 22nd, 2019

Smartphone shipments in Latin America fell 3.3% year-on-year (YoY) during Q2 2019, according to the latest research from Counterpoint’s Market Monitor service. This is the fourth consecutive quarter that smartphone shipments have fallen on a YoY basis. Sequentially, shipments increased marginally by around 1%.

As the market shrinks, local brands are getting squeezed and losing out to international and Chinese players. The market is more concentrated than ever, and this trend is increasing. Within just a year, the market share of the top three brands in LATAM has grown 10 percentage points. Samsung, Motorola, and Huawei, the top three brands, now account for 71% of the total market.

Commenting on the Huawei’s performance in LATAM, Counterpoint’s Senior Analyst, Tina Lu, highlighted, “Huawei started the quarter shipping its highest ever number of smartphones.  Its volume outpaced that of Motorola as it became the second-largest brand in LATAM.  However, the US’ trade ban on Huawei, announced in May, impacted demand. It affected its shipments, especially from June onwards.  Looking forward, Huawei’s position in LATAM could remain limited to a single-digit share if the trade ban continues. Even if the trade ban is lifted during the next couple of months, it will take some time to pick-up the growth pace it enjoyed in LATAM during most of H1 2019, unless it gets serious about setting up an assembling/manufacturing facility in Brazil.”

Parv Sharma, Research Analyst, added, “Samsung and Motorola have both been the biggest winners of Huawei’s drop. Samsung regained leadership in each of the big markets of the region after being challenged in some markets by Huawei. Samsung’s performance was due to price cuts for the J series and the launch of the new A series. It is also spending massively on advertising across all channels. This combination has led to its highest ever market share. Meanwhile, Motorola once again became the second-largest player in the region. It had double-digit YoY growth, as it managed to stay a strong number two in both Brazil and Argentina.”

Exhibit 1: LATAM Smartphone Market Share

LATAM Smartphone Market ShareSource: Counterpoint Research Market Monitor Q2 2019

Commenting on the price-band trends in LATAM, Tina Lu, highlighted, “LATAM is still a low-end smartphone market, almost 57% of the smartphones sold cost less than US$199, although this share is declining. People are spending slightly more on a smartphone, and as a result, the beneficiary is the US$200-US$299 price-band. Huawei and Motorola have been the main drivers of this increase. Motorola discontinued its C series at the end of last year and left only the E series in the entry-level segment and the G series as its mid-range device. This has also led to an average selling price (ASP) increase.”

While the <US$99 price-band remains the largest in LATAM with a 35% market share, volumes in this price-band declined 11% YoY in Q2 2019. The mid-range price-band (US$100 – US$199) has grown 13% compared to the previous year, fuelled by Motorola, Huawei, and to a lesser extent, Nokia HMD. The mid-high price band (US$200 – US$299) was the fastest-growing segment mainly due to the volumes of the Huawei P Lite and Samsung A7, after price drops. Volumes in the price-bands above US$300 decreased. Samsung is the leading brand across all price-bands except the US$300 -US$399 price-band, where it trails Huawei.

Exhibit 2: LATAM Smartphone Price-Band Market Share

LATAM Smartphone Price-Band Market ShareSource: Counterpoint Research Market Monitor Q2 2019

Market Summary:

  • Samsung’s volumes increased at a double-digit rate on a YoY basis. More than four out of 10 smartphones shipped in the region during Q2 2019 were from Samsung.
  • Motorola’s YoY growth was due to its success on the open channel as well as Argentina and Brazil. It has a good understanding of the open channel and benefited from the fact that the open channel that has grown fastest in LATAM over the last three years.
  • LG continues to decline, both YoY and quarter-on-quarter (QoQ). Brazil is the only market where it is still a strong number three. In some LATAM markets, such as Mexico and Colombia, it is not even in the top five best-selling brands.
  • Apple’s volumes decreased in most LATAM markets. But the worst-performing markets were Brazil, Chile, and Mexico. The XR and XS models are too expensive for LATAM while the 7 and 8 are not able to lure users.
  • Alcatel had a slight increase over the previous quarter and YoY. The brand had a major restructuring in the second half of last year. Its sales are improving slightly in most LATAM markets, especially in Brazil, Colombia, and Mexico.

The comprehensive and in-depth Q2 2019 Market Monitor is available for subscribing clients. Please feel free to contact us at press(at)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

Parv Sharma

Peter Richardson

Follow Counterpoint Research
press(at)counterpointresearch.com

You can also visit our Data Section (updated quarterly) to view smartphone market share Globally and from the USA, China and India

Moto G : Motorola's Emerging Markets Play With Google At Heart

After almost a couple of years of efforts to revive the once popular “Razr” brand again (but  in the smartphone space) with limited success, Motorola the device company, was on the verge of a complete overhaul to survive in this cut-throat smartphone market. And all commenced with the launch of new colorful and customizable Moto X this summer infused with rejuvenated marketing, attitude and portfolio. What we saw with Moto X was Motorola trying to differentiate by focusing more on user experience finding  solutions to various pain points maybe by offering more options to customize the phone to nuances like touchless gesture control leveraging its hardware expertise while growing further on embedded software engineering curve. I have been testing Moto X for couple of months now and pretty satisfied with the usability, features and buttery experience on the device.

The new flagship device hardly left the US shores and also didn’t make any dents in the competition but we believe Moto X is a step in good direction to see a “revived” Motorola. Our Monthly Market Pulse service estimates Moto X sell-out was roughly less than 500k units till end of October since launch in late August 2013. If Motorola can increase its reach in coming months with aggressive holiday season pricing and some marketing dollars influx (maybe from Google) could capture share away from likes of LG, HTC, Huawei, etc. But is this enough to become (again) a global company once Mototola was? No, and we think Motorola also understands that.

Moto Portfolio X & G

Realizing this, Motorola yesterday announced the new smartphone,  Moto G,  broadening the “Moto” portfolio positioning it for the prepaid emerging markets,. The superphone in terms of hardware specifications sports a 1.2 GHz Qualcomm Snapdragon 400, 1GB of RAM, 3G radios and a bigger 4.5 inch 720p HD display all starting at an exceptional unsubsidized unlocked retail price of US$179. Moving down the price-bands should help Motorola expand reach in emerging markets.

Moto G is “the killer” semi-premium type device which industry was hoping Apple would launch in terms of “iPhone 5C or iPhone Mini” to disrupt the emerging markets but Motorola (now a Google company) has taken the first plunge. We believe, Motorola is slowly moving towards a narrower portfolio (like iPhone) to maintain scale, unified design and offerings unlike its earlier broader portfolio of SKUs.

This (extremely low) pricing strategy for a high-price band specced device depicts that Motorola is no longer a device manufacturer at heart and its parent Google has started to heavily influence the overall Motorola’s strategy. In addition to the ‘Nexus’ line, Google now thus has ‘Moto‘ portfolio in its arsenal to get maximum higher specced device in hands of emerging markets consumers at lower price-points and multiply its (directly controlled) installed base. Motorola’s core business model and strategy has now started to align closely with that of Google’s, its all about reach, Google experience and eyeballs.  

However, to succeed in emerging markets such as Latin America, India and others distribution reach is the key in addition to a good brand, product and marketing muscle. Over the last few years, Motorola has done exactly opposite i.e. shrunk its global reach compared to what it enjoyed during the Razr mania times. Motorola will have to work actively smart and lean to expand its reach to gets it disruptively priced (but low profit) Moto G into the hands of consumers & maintain healthy balance sheet. Google’s ($$) contribution will be of utmost importance as the Motorola’s operating losses have continued to widen over the last few quarters.

It remains to be seen whether operators in prepaid markets of Europe warm to Moto G which could be a killer device to help them increase smartphone subscribers and hence data ARPU. However, there is a big question mark on Motorola’s China strategy as the vendor’s market share in the world’s largest smartphone market has hit an all-time low according to our latest Market Monitor Q3 2013 report. In Latin America, though Motorola should be able to compete well against Samsung, LG and Alcatel-TCL with $179 price tag and comparatively stronger brand equity.

In summary, Motorola moves ahead expanding  “Moto” portfolio across price-bands and geographies but with a renewed goal & strategy closely aligned to that of Google’s. Finally, Motorola is now a Google company.

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