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
Source: 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
Source: 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.
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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.
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