2015 Q2: WorldWide smartphones market share: Samsung 26.8%, Apple 16.4%, Huawei 7.6%, says TrendForce.

The latest analysis from the global market research firm TrendForce finds smartphone shipments in the second quarter of 2015 grew 1.9% over the previous quarter to 304M units. Shipment growth in the second quarter slowed as vendors prepared to launch their flagship devices in this year’s second half. However, shipments of branded Chinese smartphones benefited from the Chinese Labor Day sales and their entries into the overseas markets. TrendForce reports the second quarter shipments of Chinese branded smartphones had an above global average growth of 15.6% with 126M units shipped. 

TrendForce has also made downward revision to smartphone shipment growth for the entire 2015 from 11.6% to 8.2%. According to Avril Wu, TrendForce’s smartphone analyst, this revision is attributed to the negative global economic outlook for the second half of this year and weakening demands. 

“Compared with the high 26.5% growth of 2014, this year’s smartphone shipment growth is entering a plateau period,” said Wu. “Therefore, vendors are likely to face serious challenges when shipping their products in the near future.” 

Samsung tops global shipments while Apple is expected to maintain its high sales record with the next-generation iPhone in the second half of 2015

Samsung has led in smartphone shipments with 26% of global market share in the second quarter. However, Galaxy S6 and S6 Edge’s annual shipment forecast has been marked down to 45M units based on TrendForce’s latest estimation. As Chinese vendors are taking more shares of the low- to mid-range product market, Samsung’s ability to reverse its fortune may hinge on the success of its Galaxy Note 5. If this device is able to attract consumers with upgraded specs and new features, then Samsung will avoid the high possibility of negative shipment growth for this year. 

Apple rode on the popularity of iPhone 6 and iPhone 6 Plus in this year’s first half and achieved a remarkably strong shipment result in the off-peak season. The next-generation iPhone due to be launched this year offers no major changes in appearance, but Apple has given the device a new A9 processor and upgraded its memory to 2GB LPDDR4 for the first time. These improvements along with the Force Touch module and a camera featuring a possible resolution of 12MP will give the next iPhone a huge boost. Thus, TrendForce’s iPhone shipment forecast for this year continues to be very positive with a high growth of 15% upwards. 

LG’s flagship model G4 officially entered the market in the second quarter, but its sales have fallen below expectations. G4’s hardware improvements are not as exciting to the consumers compared with the upgrades made on its predecessor G3, which features a 2K display and 3GB memory. TrendForce has also revised LG’s annual shipment growth downwards to 8%. 

Huawei has become No. 1 Chinese smartphone brand with projected shipments reaching 100M this year 

Huawei is the No. 1 Chinese smartphone brand because of its decent sales record in the overseas market and stable relations with telecom operators. With an estimated annual shipment growth of near 40%, Huawei is expected to become the first Chinese smartphone vendor to reach 100M units shipped this year. 

Lenovo by contrast has fallen to No. 6 in the global shipment ranking and is expected to see a 20~30% decline in this year’s shipments. Lenovo’s market share did not double as anticipated after its takeover of Motorola in 2014. Moreover, Lenovo did not have a well-defined product positioning strategy and the brand faced strong competition from challengers offering lower-priced smartphone models. 

Earlier this year, the closely watched Chinese vendor Xiaomi released Mi Note, the brand’s first premium smartphone. However, Mi Note products suffered from an overheating problem caused by Qualcomm Snapdragon 810 chipset, and competitors with low-priced smartphones have been reduced Xiaomi’s market share. 

Xiaomi shipped 34M units in this year’s first half and is currently far from its annual shipment target of 100M. Nonetheless, it overtook LG in the second quarter’s global shipment ranking and is at No. 4. TrendForce estimates Xiaomi’s global smartphone shipments in 2015 to grow by around 15% year on year to 70M units. 

Two other Chinese smartphone vendors that are also being closely watched are OPPO and VIVO, as the former specializes in camera smartphones and the latter develops smartphones featuring the best music listening experience. Both vendors have made significant gains in the overseas market owing to their distinct product positioning strategies, and both will maintain steady and high shipment growth this year. TrendForce estimates both OPPO and VIVO will post year-on-year shipment increase of 30% or more in 2015. 

4Q 2014: Samsung shipped 600.000 smartphones more than Apple says IDC. Charts.

Table Notes:

• Data is preliminary and subject to change.
• Vendor shipments are branded device shipments and exclude OEM sales for all vendors.
• The "Vendor" represents the current parent company (or holding company) for all brands owned and operated as subsidiary.
• For year-over-year comparison, an extra line has been added below the quarterly and annual tables to show what Lenovo's growth would have looked like had its acquisition of Motorola been completed prior to the start of the quarter.

Holiday seasonality, strong end-user demand, and a deep selection of models propelled smartphone volumes to a new record level for the quarter and for the year. According to preliminary data from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, smartphone vendors shipped a total of 375.2 million units during the fourth quarter of 2014 (4Q14), resulting in 28.2% growth when compared to the 292.7 million units shipped in 4Q13 and 11.9% sequential growth above the 335.3 million units shipped in 3Q14.

For the full year, the worldwide smartphone market saw a total of 1,301.1 million units shipped, up 27.6% from the 1,019.4 million units shipped in 2013.

Having spent 11 quarters prior to 4Q14 as the number two smartphone vendor in terms of shipments, Apple managed to close the gap to a near tie with Samsung in 4Q14. Led by the success of its newer, larger iPhone 6/6+ models, Apple reduced the volume gap to just 600,000 units in the fourth quarter. 

Despite being far more profitable for quite some time, Apple's shipment volumes trailed Samsung's by more than 33 million units during the same quarter a year ago. Continued success from Apple, coupled with the ongoing challenges facing Samsung, could enable Apple to overtake Samsung during the 2015 calendar year. Samsung's challenges have not only come from Apple, but also from the increasing number of low-cost Android OEMs that are putting out products at much lower margins. In order for Samsung to regain its share at the top, it will either have to accept lower margins from here forward or revamp its high-end strategy to compete with Apple.

"Most of the industry expected an extremely strong holiday quarter from Apple, especially with regards to the iPhone. However, worldwide shipments of 74.5 million units beat everyone's expectations," said Ryan Reith, Program Director with IDC's Worldwide Quarterly Mobile Phone Tracker. "Beyond the record-setting quarter, a few impressive things stand out with regard to Apple. First, at a time when average selling prices (ASPs) for smartphone are rapidly declining, Apple managed to increase its reported ASPs in the fourth quarter due to higher-cost new models. Second, the growth of iPhone sales in both the U.S., which is considered a saturated market, and China, which presents the dual challenges of strong local competitors and serious price sensitivity, were remarkable. Sustaining this growth and higher ASPs a year from now could prove challenging, but right now there is no question that Apple is leading the way."

In 2013 IDC talked about the smartphone industry topping the 1 billion unit milestone, and while year-over-year growth did slow from 40.5% in 2013 to 27.6% in 2014, the market clearly still has legs. This past year volumes surpassed 1.3 billion units and the vendor scenario has witnessed continued shakeups. Growth is forecast to decline to the mid-teens in 2015, but opportunity exists as much of the world's population is either not a wireless subscriber or has yet to move to a smartphone.

"That the worldwide smartphone market grew by 27.6% in 2014 is noteworthy, but it also represents a significant slowdown compared to 2013," said Ramon Llamas, Research Manager with IDC's Mobile Phone team. "Mature markets have become increasingly dependent on replacement purchases rather than first-time buyers, which has contributed to slower growth. In emerging markets, first-time buyers continue to provide a lot of market momentum, but the focus has shifted toward low-cost devices, creating a different dynamic for both global and local vendors.

"What remains to be seen is how the vendors beyond Samsung and Apple will assert themselves," added Llamas. "With Lenovo acquiring Motorola, and Xiaomi having greater aspirations beyond China, the competitive pressure will come more from below and less from above. This will make the smartphone race continuously competitive as 2015 shapes up."

Smartphone Vendor Highlights:

Samsung remained the leader in the worldwide smartphone market for the quarter and for the year, but nonetheless experienced continued competitive realities. With increased pressure in the high-end from Apple, and at the low-end to midrange from Chinese manufacturers Xiaomi, Huawei, ZTE, and others, Samsung faces a multi-front battle. To this end, Samsung has streamlined its operations and product portfolio to become more competitive in the market.

Apple reached a new quarterly shipment record in 4Q14 and fell just short of surpassing Samsung for overall leadership in the smartphone market. An elevated consumer appetite for big-screen devices, as well as Apple's push into China and other countries, saw iPhone sales up 44% in the U.S. and up 97% in the BRIC countries (Brazil, Russia, India, China). Sales doubled year-over-year in China, Brazil, and Singapore. What remains to be seen is how long Apple can sustain this runaway growth.

Lenovo was a distant third in the fourth quarter, narrowly edging out Huawei thanks to the completion of the Motorola acquisition earlier in the quarter. Lenovo continued to dominate the sub-$150 handset market in China with a vast portfolio of devices including the popular Golden Warriors S8 and more expensive flagship Vibe Z2 pro. Lenovo has recently announced that it will bring the Motorola brand back to China in 2015, starting with the Moto X next month.

Huawei returned to the list of top 5 worldwide vendors, emphasizing its midrange and high-end smartphones (P Series and Mate Series respectively), and saw continued success with its Honor line. Huawei attributed its 2014 success to improved brand awareness and overall customer experience, which it will look to evolve even further in 2015.

Xiaomi fell from the third position to fifth in 4Q14, beating out LG for the final spot among the top 5. Even though volumes declined slightly from 3Q14 levels, Xiaomi posted the largest year-over-year growth of all the leading vendors, thanks to a solid demand within its home country of China and a steady release of new devices, including the Mi4 LTE. Xiaomi's grip on the number 5 spot is tenuous at best, with LG and ZTE following close behind.

iCharts