Friday, April 22, 2016

1Q 2016: Samsung doubles Apple in smartphone worldwide market share: Samsung 27.80%, Apple 14.40%, Huawei 9.30%

Global market research firm TrendForce reports that the worldwide smartphone shipments in the first quarter of 2016 totaled 292 million units, down 18.6% from the previous quarter and a year-on-year decline of 1.3%. The decrease was mainly attributed to market saturation. Leading brands such as Samsung and Apple no longer have the same growth momentum as before, so the overall shipments depended on contributions from Chinese brands and rising demand in India and other emerging markets.

Avril Wu, TrendForce smartphone analyst, said the combined shipments (including exports) from Chinese brands in the first quarter reached 125 million units, surpassing the combined shipments from Samsung and Apple for the first time. Chinese brands accounted for 42.9% of the global smartphone shipments, up from 41.5% in the previous quarter. In their home market, Chinese brands have benefitted from increasing subsidies for 4G smartphones from domestic telecom operators. 

At the same time, they have gain grounds in foreign markets. As a result, Chinese smartphone makers did not suffer as steep shipment decline as their foreign competitors did in the off-peak season of the first quarter. Their combined quarterly shipments fell by only 16%. On the other hand, the competition in the overseas markets have intensified as major international brands are struggling to keep their market shares. This will continue to put pressure on Chinese vendors’ margins.

Apple is unlikely to make a turnaround for this year’s shipments with iPhone SE; Samsung grew its shipments against market headwinds.

Apple posted its largest quarterly decline ever for iPhone shipments, plummeting 43.8% from 75 million units in last year’s fourth quarter to just 42 million units in this first quarter. Sales of iPhone 6s have been lackluster as the model lacks exciting new features. Moreover, Apple’s management of channel inventories have become more conservative before the launch of its next iPhone. TrendForce thus has lowered its iPhone shipment estimate for this year to 213 million units, an almost 10% drop compared with the previous year.

Wu said: “As the budget model, iPhone SE will support Apple’s overall shipments in the second quarter before the next major iPhone release. However, iPhone SE is going to face severe price competition from Chinese branded products in its target market, which is the mid-range device segment. This year’s iPhone SE shipments are projected to come in below 15 million units and they are unlikely to help turn around the weak annual shipment result for Apple.”

Samsung’s first-quarter shipments exceeded expectations and arrived at 81 million units, up 2.5% from the prior quarter. Samsung boosted its smartphone sales by launching its flagships Galaxy S7 and S7 Edge ahead of schedule and stepping up its promotional activities. 

Additionally, the vendor’s J series, which consists of entry-level devices with high cost-performance ratios, has been a success in China and worldwide. TrendForce has raised Samsung’s 2016 shipment projection to 316 million units, which is about the same level as last year. This upward revision in the shipment estimate also suggests that the vendor is going to retain its market share by keeping margins low. Hence, Samsung’s mobile profit may drop slightly in the next few quarters.

Compared with other smartphone makers, LG has put in a bit more effort in developing new designs and features for its products – from G3, the first smartphone with a 2K screen, to V10 that came with a secondary display for notifications. G5, the flagship that the South Korean brand revealed at this year’s Mobile World Congress, is the first “modular type” mobile device. 

This design features detachable component modules, which allow the customization and enhancement of G5’s functionality. Besides batteries, G5 users can also swap camera and audio components. Despite LG’s innovations, it posted a slight shipment decline in this first quarter due to encountering escalating market competition. The company stayed at No. 6 in the worldwide market share ranking.

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