Latin America LTE Smartphones Grew 196% Annually in Q2 2016

According to the latest Market Monitor Report from Counterpoint Research, the Latin America smartphone market contracted by 14% YoY and almost flat sequentially. However, the LTE capable smartphones segment grew a massive 196% annually.

Counterpoint Research’s Senior Analyst, Tina Lu, commenting on the slowdown, “The June ending quarter normally sees a seasonal uptick in demand, due to Mother’s Day celebrations and this time with Rio Olympics build up, demand was expected to pick up. However, the overall smartphone market demand dipped during the quarter mainly due to the markets such as Brazil & Venezuela marred by unstable political conditions and buildup of years of mismanagement of resources – leading to a weaker economic climate.”

However, markets such as Peru, Mexico and Argentina registered annual double digit growth, which somewhat offset the downturn in Brazil and Venezuela. The key factors driving the growth in these markets were the increasing adoption of LTE smartphones as operators transition from saturated 3G to 4G networks, declining price for 4G smartphones (-45% YoY) and a relatively positive economic climate. Three in four smartphones shipped during the quarter was LTE capable.”

Counterpoint Research’s Research Director, Jeff Fieldhack, added, “Like mobile operators, mobile phone OEMs have been transitioning to LTE portfolios with Samsung, LG, Motorola and Alcatel leading the way.  The largest vendor in LATAM, Samsung, upgraded most of its portfolio to LTE led by the J-series, which has proven to be very popular.  Its popularity has driven most of the LTE volume growth for Samsung in the region.”

“Markets such as Brazil and Mexico have seen good LTE growth, but because of manufacturing laws and the need to have strong business ties with the key players, it has proven difficult for some of the fast-growing Chinese brands such as Oppo and Xiaomi.  In the June quarter Oppo reached the top position in the Chinese market.  However, during the same period the company pulled out of Mexico having failed on its go-to-market strategy with America Movil.  Similarly, Xiaomi did not perform well in Brazil and is on the brink of pulling out of the country.  Established Chinese brands such as Huawei, Alcatel and Motorola have fared better either holding or gaining market share in a contracting market.  This illustrates that for new brands to succeed in Latin America, it is imperative to cultivate long-term relationships with operators and various offline channels.”

Market Summary: 

  • Eight out of ten mobile phones shipped in LATAM were smartphones.
  • The overall smartphone market contracted -14% YoY.
  • This decline was mainly due to the decline of the largest smartphone market in LATAM, Brazil, which saw smartphone demand decline a significant -19% YoY.
  • Besides Brazil, both Chile and Venezuela also registered YoY declines. Venezuela saw the steepest ever decline of 40% YoY as it is currently suffering from an economic crisis with inflation reaching an all-time-high of 482%.
  • In contrast, Peru was the fastest growing smartphone market in LATAM registering 50% YoY growth. Mexico and Argentina also registered healthy double digit growth in smartphone demand.

Exhibit 1: LATAM Smartphone Shipment Growth by Countries Q2 2016

LATAM Growth YoY q2

  • Three in four smartphones shipped in LATAM during Q2 2016 were LTE capable, registering 196% annual growth.
  • Most of the top brands such as Samsung, Motorola, LG registered 300%+ growth in the LTE volumes annually.

Exhibit 2: LATAM LTE Smartphone Shipment Q2 2016

LATAM OEM LTE Share q2

  • Samsung gained 1580 basis points of share YoY, growing to 41.1% market share. The company has also been the brand with the highest positive movement with 380% YoY growth.
  • LG was the second largest LTE smartphone vendor in LATAM, with strong performances in Brazil Mexico and Argentina. The company saw growth of 314%.  
  • Motorola moved to 3rd place, with the 2nd highest YoY growth of LATAM LTE smartphone market.
  • Rounding out the top 5 in market share are Huawei and Alcatel. Huawei grew in volume, but lost share in this high growth market.
  • Apple, Sony and Microsoft (Nokia) all lost share and volume YoY.
  • The LTE smartphone ASP declined a massive 45% annually to the $200 level, a key driver for LTE growth in the region.
  • Bmobile, Lanix and Positivo led the regional brands in the LTE smartphone space. Only Bmobile, however, was able to crack the top 10 best-selling LTE smartphone brands.