IDC Report's on Q1 2016 Global Smartphone Status with Two New Chinese Vendors Rocketing to the Top 5 Vendor List
According to the latest preliminary release from IDC, vendors shipped a total of 334.9 million smartphones worldwide in the first quarter of 2016 (1Q16), up slightly from the 334.3 million units in 1Q15, marking the smallest year-over-year growth on record. The minimal growth this quarter is primarily attributed to strong smartphone saturation in developed markets, as well as a year-over-year decline from both Apple and Samsung, the two market leaders. Apple's iPhone business suffered most in Mainland China at the very same time that two unknown local smartphone vendors came rushing into the Chinese market to overtake Lenovo and Xiaomi. The sheer number of local vendors may be an issue over time and something to keep an eye on going forward.
IDC notes that Apple's saw its' first-ever year-over-year decline in Q1 as volumes slipped to 51.2 million units, down 16.3% from last year. Despite the plethora of new features found on the newer "S" models, current iPhone 6/6 Plus owners may feel that a 6S upgrade may not be warranted at the moment.
The report further noted that Apple also announced the new iPhone SE, which looks to challenge similarly priced Android options in numerous emerging markets where Apple has traditionally been seen as too expensive. The SE features all the power of the 6S in a compact form factor that looks to equally target those who desire smaller phones as well. However, at US$399, the SE still faces equally powerful lower-priced devices from competitors, particularly within India and China. As Apple CEO Cook mentioned on the company's earnings call, the SE will begin having an impact on iPhone shipments in the second quarter of 2016.
Samsung remained the leader in the worldwide smartphone market despite a year-over-year decline of 0.6% in shipments. Despite the slight decline, the new Galaxy S7 and S7 edge sold vigorously in the month of March and was helped by numerous enticing carrier promotions to help push volume. The S7 also brought the reintroduction of a microSD card slot in combination with waterproofing, which looks to have paid off for the Korean giant as early sales look healthy. Within emerging markets, Samsung has performed well with its more affordable J-series as it looks to capture both budget conscious consumers and first-time buyers.
Huawei's continued domestic dominance, combined with a growing presence outside of China, enabled it to capture the number 3 position worldwide in 1Q16. Shipment volume for Huawei climbed from 17.4 million units in 1Q15 to 27.5 million this quarter for year-over-year growth of 58.4%. Huawei's two-pronged approach with a focus on both premium and entry-level devices proved successful in China as well as in many developed European markets. The recent launch of the P9 smartphone featuring Leica optics provided an additional weapon with which to combat Apple and Samsung. Premium devices like the P9, Mate Series, and Nexus 6, along with entry level devices from its Honor brand, should help Huawei gain further traction worldwide.
The Biggest Surprise: The biggest change to the market, however, was the addition of lesser-known Chinese brands OPPO and Vivo, which pushed out previous fourth and fifth place players Lenovo and Xiaomi, respectively.
As the China market matures, the appetite for smartphones has slowed dramatically as the explosion of uptake has passed its peak. In 2013, China's year-over-year shipment growth was 62.5%; by 2015, it had dropped to 2.5%. Conversely, the average selling price (ASP) for a smartphone in China rose from US$207 in 2013 to US$257 in 2015.