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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

 

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LTE devices made up 77% of total shipments in Peru

Peru smartphone shipments grew 27% annually in Q3 2017, and 10% compared to the previous quarter. Since the entrance of Entel, the 4th operator, Peru has become one of the most competitive markets in LATAM. Operators still offer subsidies on devices to retain or to compete for new subscribers. As a consequence operators control more than 90% of handset distribution.

The, top six brands represent more than 70% of the smartphone market. The remaining 30% is shared by a long tail of more than 40 brands. Chinese smartphone brands had almost 40% share of the total smartphone market. The leading players are Huawei, Motorola and ZTE.

Opportunities such as number portability and low mobile penetration in some rural areas, triggered carriers to adopt different strategies to increase market share.  Amid this race, OEMs that can offer the best brand-price-feature combination, will likely advance. Huawei has been aggressive, surpassing Samsung to become the number one player in the smartphone market in 3Q 2017. Huawei had 18% market share followed by Samsung with 14% share. LG and Motorola grabbed third and fourth positions in the smartphone market. Motorola registered strong annual growth of 150%, with its C series smartphones performing well. Vietnamese carrier Bitel is a surprisingly strong player – its own branded smartphones captured fifth position, almost quadrupling its shipments annually in the quarter, albeit from a low base.

Exhibit 1: Peru Smartphone Shipments Ranking and Market Share – Q3 2017Source: Counterpoint Research: Quarterly Market Monitor Q3 2017

MediaTek captured almost half of the smartphone market followed by Spreadtrum and Qualcomm with 15% and 13% market share. MediaTek is catering to the needs of low-mid range segment and is being embedded by LG, Huawei and Motorola in their key models. These three SOC players captured almost 80% of the total smartphone market. The rest of the market is shared by Huawei’s HiSilicon-branded processors, Apple and Samsung (Exynos).

 

Market Summary

  • Shipments in Peru during Q3 2017 grew a healthy 27% annually and 10% sequentially.
  • Smartphones represented 79% of handset shipments in the quarter.
  • LTE devices made up 77% of total shipments and grew 29% YoY and 4% QoQ.
  • Huawei became the number one player in the Peru smartphone market surpassing Samsung in 3Q 2017.
  • Samsung declined 34% annually and 52% sequentially falling to second position behind Huawei. Samsung is facing strong competition from Huawei, Moto and LG.
  • LG captured third position with 13% share. LG grew 12% annually, with its K series performing well and providing tough competition to Samsung’s J series.
  • Motorola more than doubled its shipments annually in Q3 2017 with its best-selling smartphone Moto C providing the driving force.
  • More than 70% of smartphones shipped had a screen size that was greater than 5.0 inches.
Exhibit 2: Peru Bestselling Smartphone Rankings – Q3 2017
Source: Counterpoint Research: Quarterly Market Pulse Q3 2017
  • Top 10 smartphones represent almost 40% of the total smartphone market.
  • Eight of the 10 bestselling smartphones were in the <100 USD import price band.
  • Motorola Moto C was the top sell-in Smartphone during Q3 2017. More than half of the model’s volume was pushed by Entel.
  • Huawei Y6 and Y7 models have the highest ASP among the top selling models. Both have ASP higher than USD 100.
  • Samsung has only two older models J1 Mini Prime and J2 Prime in the top 10 bestsellers.

 

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