Global Smartphone Growth Flattens Out, Chinese Vendors on the Rise

• By Richard Chang
• 04/28/16

Worldwide smartphone shipments leveled off during the first quarter of 2016, marking the smallest year-over-year growth on record, according to preliminary data released today by International Data Corp. (IDC), a market research firm.

Vendors shipped a total of 334.9 million smartphones during Q1 2016, up slightly from the 334.3 million units shipped in Q1 2015. The minimal growth was caused by strong smartphone saturation in developed markets, as well as year-over-year declines from both Apple and Samsung, the two market leaders.

The most significant change to the market was the addition of lesser-known Chinese brands Oppo and Vivo, which pushed aside previous fourth- and fifth-place sellers Lenovo and Xiaomi, respectively. Nonetheless, as the Chinese market matures, the demand for smartphones has slowed dramatically.

In 2013, China’s year-over-year shipment growth was 62.5 percent. By 2015, it had dropped to 2.5 percent, IDC reported. In contrast, the average selling price for a smartphone in China rose from $207 (U.S.) in 2013 to $257 in 2015.

“Along China’s maturing smartphone adoption curve, the companies most aligned with growth are those with products serving increasingly sophisticated consumers,” said Melissa Chau, senior research manager with IDC’s Worldwide Quarterly Mobile Phone Tracker, in a prepared statement. “Now Huawei, Oppo and Vivo, which play mainly in the sub-$250 range, are positioned for a strong 2016. These new vendors would be well advised not to rest on their laurels though, as this dynamic smartphone landscape has shown to even cult brands like Xiaomi that customer loyalty is difficult to consistently maintain.”

Anthony Scarsella, research manager with IDC’s Mobile Phone team, said many brands are virtually unknown outside of China, yet they need to break into mature markets such as the United States and Western Europe if they want to compete with Apple or Samsung at the top of the global smartphone heap.

IDC released some other vendor highlights on Thursday:

• Samsung remained the leader in the worldwide smartphone market, despite a year-over-year decline of 0.6 percent in shipments. Samsung saw its market share dip from 24.6 percent in Q1 2015 to 24.5 percent in Q1 2016, shipping 82.4 million and 81.9 million in those respective time periods. However, the Galaxy S7 and S7 edge sold well during the month of March.

• No. 2 Apple witnessed its first-ever year-over-year decline in the first quarter as shipments slipped from 61.2 million units in Q1 2015 to 51.2 million units in Q1 2016. Apple’s market share also slid from 18.3 percent in the first quarter of 2015 to 15.3 percent in Q1 2016.

• Coming in at third was Huawei, which has dominated in China and started growing its presence beyond. Huawei saw 58.4 percent year-over-year growth, capturing 8.2 percent of the global market in Q1 2016, compared to 5.2 percent a year earlier. It shipped 27.5 million units in Q1 2016, compared to 17.4 million in Q1 2015. Huawei was one of two manufacturers selected to produce Google’s latest flagship phones in the Nexus line this year. (Huawei manufactured the Nexus 6P, which goes for about $500, while LG produced the more diminutive Nexus 5X, which sells for about $350.)

• No. 4 Oppo saw phenomenal growth over the past year, with a 153.2 percent year-over-year increase. The Chinese company, which landed first in Thailand, shipped 18.5 million units and had a 5.5 percent market share in Q1 2016, compared to 7.3 million units and a 2.2 percent market share in Q1 2015.

• Finally, Vivo rounded out the top 5, with a robust 123.8 percent year-over-year increase. The Chinese smartphone manufacturer had 4.3 percent of the global market in Q1 2016, compared to 1.9 percent in Q1 2015. It shipped 14.3 million units in Q1 2016, compared to 6.4 million during the first quarter of 2015.