The Strategist

Chinese smartphones pressing Samsung and Apple


05/24/2017 - 12:29



Gartner research company reported that about 380 million smartphones were sold in the Q1 2017 around the world, which is 9.1% more than a year earlier. Market shares of the global smartphone market’s leaders, Samsung and Apple, fell by 1-3%, while Chinese manufacturers Huawei, Oppo and Vivo increased their share by 1-4%. As for the global mobile OS market, Android still leads by a large margin, having increased its share since last year by 2.5%, to 86.1%, while the share of iOS decreased by 1.1%, to 13.7%.



pixabay
pixabay
According to Gartner, worldwide smartphone sales in the first quarter of this year jumped as users started spending a little more than usual in an attempt to choose more modern and advanced smartphones. At the same time, the researchers note that Chinese manufacturers, such as Huawei, Oppo and Vivo, took an advantage from the desire to make the upgrade. They "focused on the strategy of creating phones with the most relevant characteristics at a more affordable price". Sales of the "big three" Chinese smartphone manufacturers are growing thanks to moderate pricing and high quality smartphones equipped with innovative features", said Anshul Gupta, research director at Gartner. "In addition, aggressive marketing and sales promotion allows them to select shares in such large markets as India, Indonesia and Thailand". 

Speaking of the world market leaders, Samsung and Apple, Mr. Gupta noted that "although Samsung said that number of pre-orders for the Galaxy S8 and S8 Plus was 30% higher than the number of pre-orders for flagships in last year, lack of an alternative to Note 7 and the fierce competition in the base segment have caused Samsung to lose its previous market share". The decrease numbered 3.1%, to 20.7%. "IPhone sales remained generally at the same level compared to last year, therefore (because of the growth of the entire market), the company's share decreased. Like Samsung, Apple is also experiencing fierce competition from Chinese brands Oppo and Vivo and other Chinese manufacturers, so sales of Apple's smartphones in China are under pressure", said Gartner’s representative. Apple’s share has decreased by 1.1% yoy, to 13.7%. At the same time, the share of Huawei, which holds the third place in the world in terms of the number of smartphones sold, has grown by 0.7% to 9% since last year. Oppo's climbed up yb 3.5%, to 8.1%, and Vivo's share has increased by 2.8%, to 6.8%.

Android and iOS are still the clear leaders in the mobile OS market. Although iOS share fell together with iPhone’s sales - by 1.1%, to 13.7%, Android’s share increased by 2%, to 86.1%.

After appearance of the first iPhone 10 years ago, global smartphone sales have been growing rapidly for a long time: in 2010, shipments increased by 75.8% compared to 2009. By 2015, however, the rate has fallen to 10%, and in 2016, sales, according to IDC, increased by only 0.6%, reaching 1.45 billion units. 

The situation is explained by several factors. First, the world market is largely saturated. American mobile operators that previously subsidized consumers buying smartphones under long-term contracts recently rejected this practice and began charging customers full price (it is at least $ 649 in the case of a new iPhone 7). As a result, consumers are less likely to buy new devices instead of old ones. According to Citigroup, the average update cycle, which in 2011 was 24 months, has already reached 31.2 months in the third quarter of 2016.

source: wsj.com, fortune.com




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