IDC: Worldwide smartphone volumes relatively flat in Q216; Samsung widens market share lead over Apple

According to preliminary results from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, vendors shipped a total of 343.3 million smartphones worldwide in the second quarter of 2016 (2Q16). This was relatively flat, up 0.3% from 2Q15 when vendors shipped 342.4 million units. The market did show greater sequential growth as shipments were up 3.1% from 333.1 million in the first quarter of 2016.

“We continue to see a number of changing dynamics in the smartphone market and many vendors are readjusting their business strategy and portfolio to take advantage of these market movements,” said Ryan Reith, program vice president with IDC’s Worldwide Quarterly Mobile Device Trackers, in a statement. “Mature markets continue the transition away from pure subsidy and over to EIP programs and Apple is beginning to put more emphasis on ‘Device as a Service’ to try to prevent lengthening replacement cycles. This is a growing theme we have heard more about from PCs to smartphones. Additionally, the overall China market slowdown continues to ramp up competition in other high growth markets like India, Indonesia, and Middle East. Interestingly enough, our early findings show low-end Chinese OEMs that predominantly built their business domestically in China are having success penetrating non-China markets, despite low-end competition from local brands already in place.”

The top five list remained intact from last quarter with Samsung remaining in front while also gaining share thanks to strong Galaxy S7 and S7 Edge performance. For Apple, the second quarter is seasonally its lowest of the year as consumers hold off on purchases in anticipation of the next big launch in the third quarter. Apple shipped 40.4 million units in 2Q16, which marked the lowest quarterly volume in seven quarters, despite the mid-cycle introduction of the iPhone SE. In the face of declining shipments, Apple did witness strong sales in both established and emerging markets thanks to the launch of the more affordable iPhone SE.

“Outside of Samsung’s Galaxy S7 flagship, a majority of vendors, including Apple, have found success with more affordable models compared to their flagship handsets,” said Anthony Scarsella, research manager, Mobile Phones, in a statement. “As smartphone prices continue to drop and competition escalates at the high-end, vendors will need to continue to push ‘flagship-type’ devices at affordable price points to encourage upgrading on a more frequent basis. Chinese brands such as Huawei, OPPO, vivo, and Xiaomi have witnessed success with this strategy by shipping premium styled devices that focus on the features that matter most to consumers, such as imaging, sound quality, and design.”

Smartphone Vendor Highlights:

Apple’s second quarter saw the Cupertino-based giant ship 40.4 million iPhones, representing a 15.0% year-over-year decline from the 47.5 million units shipped last year. The new 4-inch iPhone SE proved successful in both emerging and developed markets as the new SE has captured many first-time smartphone buyers as well as Android users switching over to the Apple ecosystem. The success of the cheaper SE did, however, have an impact on the overall average selling price (ASP) for an iPhone in the quarter. The ASP for an iPhone was $595, down 10.1% from $662 one year ago. As smartphone competition continues to escalate and upgrades continue to slow, Apple will look to drive sales with a newly designed iPhone 7 combined with their upgrade program come this fall.

Huawei captured the third position once again thanks to strong domestic sales and even stronger European sales. The increase in these two regions contributed to shipments totaling 32.1 million units, up 8.4% from last year. Huawei’s premium lineup of phones, like the new P9 and Mate 8 handsets, also pushed 25% of the quarter’s volume to the high-end (priced $500-$600). The Honor Series combined with the Y-Series balanced out the mid-tier and low-end with models like the Honor 5X and V8 proving successful as premium-like affordable alternatives. With Huawei number one in China at the moment, Huawei’s remaining challenge will once again be penetrating the U.S. market at the high-end to compete with both Samsung and Apple.

OPPO continued with its aggressive marketing and advertising in 2Q16, especially for its flagship R9 device, which helped it see good sales in the quarter. It continued to leverage its strength in Tier 3 to Tier 5 cities in China, which significantly contributed to the strong growth. In Tier 1 cities, OPPO continued to be a leading sponsor for big name entertainment shows which has helped build the brand and bring light to its high-end portfolio. The key model for OPPO will be the R9, which right now is its top shipping model and the aggressive marketing around the device shows the company’s ambition in the high end of the market. Overall growth is still primarily in lower-tier China cities, as well as other big opportunity emerging markets like India and Indonesia.

Samsung remained the leader in the worldwide smartphone market thanks in large part to the success of the new Galaxy S7 and Galaxy S7 Edge flagship handsets. The new models proved to be the right mix of style and features and helped Samsung grow profits in the quarter. The inclusion of removable storage, waterproofing, and faster processor proved to be the winning combination for Samsung as consumers flocked to the new model. Outside of the S7, the J-Series performed well in both developed and emerging markets thanks to refreshed models (J7, J5, J3) which offer something for everyone at various sizes and price points. Look for the pending arrival of the Note 6/7, coming later this year, to challenge Apple’s latest and greatest.

Vivo is still on an upward trajectory in China, with momentum spread across multiple product models. At the time, vivo is still 100% focused on Asia/Pacific, with the vast majority of volume still in China. vivo had several new product launches in China during the second quarter, including the V3 and V3 Max. It also successfully hired the popular Korean star Soon Joong Ki as its celebrity endorser. Soon Joong Ki was the male lead in a Korean drama, “Descendants of the Sun,” which was a big hit in China. Having him as an endorser helped to give a boost to its brand as well as its smartphone sales in the region.

Top Five Smartphone Vendors, Shipments, Market Share, and Year-Over-Year Growth, Q2 2016 Preliminary Data
(Units in Millions)
Top Five Smartphone Vendors, Shipments, Market Share, and Year-Over-Year Growth, Q2 2016 Preliminary Data (Units in Millions)
Source: IDC Worldwide Quarterly Mobile Phone Tracker, July 28, 2016

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.

Source: International Data Corporation

MacDailyNews Take: Samsung. Not making it up in volume.

As always, Apple’s revolutionary iPhone dominates smartphone profit share by a vast margin, easily making more money than all Android smartphone makers combined.

SEE ALSO:
Apple’s iPhone can soon reap 100 percent of world’s smartphone profits – November 17, 2015
Apple’s iPhone owns 94% of smartphone industry’s profits – November 16, 2015

24 Comments

        1. The only one who should be supremely embarrassed here is you li’l Frankie, as always. You think high market share/very low profits is the end goal when high 94-99% profits (in devices and services)/lower market share isn’t preferable? This is why you get no respect here. (Also why you’ll never be asked to be a CEO, well except maybe at a Steve Ballmer startup that’s designed to fail.)

          Really, you work harder than about anyone else here at being extraordinarily stupid. All in the guise of charlatanism.

          1. the absolute wonder of the iPhone business is that even with making all that dough Apple doesn’t have to contend with the ‘monopoly’ ‘non competitive’ stuff that Microsoft had to deal with. If Apple had massive MARKET share (instead of the massive PROFIT share) the apple hating doofus at the DOJ etc would have had a field day “Apple needs to spin of iOS , make it open to others etc”.

            2) because Apple makes more expensive phones through it’s line , the phones are built to last, have better resale value, reuse rate etc so they don’t end up in the trash bin like old androids giving iOS a great INSTALLED base (in spite of lower total sales number) , together with a higher income user demographic it leads to record Services revenue.

    1. Again we see this nameless (anonymous coward fake nick) vulture dive in the moment a new article is posted at MDN in order to hit the top of the comments list with HATE.

      Kind of a sad job ‘Frank’. Do you whip yourself while waiting between MDN posts? “Bad Frank! BAD Frank! Again, AGAIN!” Do you blame your parents?

      1. Frank I suspect morphs into many evil troll personages on this site, or has lackluster lackeys like Mac doing his dirty work. Funny (actually not funny) the paths these loathsome petty sub-human types prefer to take. It’s certainly not to participate in great discussions or make insightful comments that aren’t littered with insults or incendiary scorched earth trollspeak.

        1. Did you notice that Apple iPhone sales fell 15% while Sansung sales increased 5%. Explain how these statistics bode well for Apple. What is the rest of the world missing that you know, bloody pecker? I’m betting you and your partner Sean can’t provide a lucid explanation without digressing into a puerile rant.

          1. There’s no explanation that would placate a troll moron like you. I won’t play your idiot game. The fact you don’t already know just means you have an agenda that puts down anything that isn’t a Frank-sanctioned fucktard lunacy.

            Congrats btw on being one of the biggest cretin trolls to ever have posted here on MDN. Sub-humans like you suggest we need to chlorinate the gene pool stat.

        2. Mac, Bob, Frank… They are most likely ONE person. It has nothing to offer apart from a demonstration of self-loathing by way of loathing others. Its incoherence is also evident as well as its homophobia. As usual, we behave toward others as we behave toward ourselves. Knowing this opens a massive door of insight into people.

          1. Well said. Oh yeah, I don’t think they’re fooling anyone, much as they delude themselves. Whoever it really is is like the Sybil of the Internet, suffering from multiple troll personality disorder. I noticed MDN has finally taken to omitting “Frank’s” recent entries. I’d call that a small victory.

  1. As always with IDC charts you have to LOL at the “other” category to bring them to 100%.

    So what if Samsung sells more phones, Apple inc. takes all the profit, so game over!!

      1. Exactly.

        They have to ship a lot to replace all those POS knockoff’s and the 2 for 1 sales. Let’s see, how many iPhones did I need to replace this year……..zero. They all work fine and continue to work. My family will replace them when something better comes along. That’s what most people do when they buy good quality products.

        That’s like saying Ford shipped more cars and trucks than Mercedes and so they are better somehow.

    1. Has anyone calculated how many Samsung scamscum phones they’d have to sell to match Apple’s profits? I strongly suspect it would be more than the number of humans on the planet. Kind of an impractical goal.

      Poor, pathetic Samsung. The only way they can gain market share is to sell CHEAP.

    2. The other issue is that in the Apple v. Samsung patent infringement lawsuit, Judge Lucy Koh required Samsung to reveal their phone product mix instead of just lumping all their phones shipped under the label of Android Smartphones.

      When they finally revealed those data, it turned out that only 30% of the phones they had been reporting as “smartphones” actually met the criteria of being “smartphones” capable of competing against the iPhone. Samsung was ALSO INCLUDING in the Android phone mix 40% Android “Feature Phones,” which are not in the same category as smartphones in that they have only built in apps and are not capable of adding additional apps. The balance of the Android phones that Samsung shipped but included in their category of “smartphones” were only basic phones that could only receive and make calls, texts, emails, and in addition take photos. They might also have a limited capability to do such things as have a contact list, a calculator, etc., but they were not, by any stretch of the imagination, a “smartphone.”

      Ergo, if we were to use that product mix percentages on the phones shipped attributed to Samsung in the IDC report, using the 30% Smartphones that Samsung itself admitted to, then 30% of 77 million would be only about 23.1 million smartphones shipped by Samsung in the 2nd calendar quarter of 2016 compared to the 40.4 million iPhones shipped (plus the 4.5 million MORE sold out of inventory according to Apple during the quarter as reported in Apple’s Financial Conference Call) making a total of 44.9 million 100% smartphones actually sold by Apple in that same 2nd calendar quarter!

  2. Being a “smartphone vendor” doesn’t mean every phone you sell is “smart”. Samsung for dang sure didn’t sell 77 million S7 & Edge phones. They make up the volume in cheap models and feature phones where they have to dive for the lowest price in order to sell their cheap crap phones.

    1. Exactly. The phone product mix that Samsung has revealed in 2013 was 30% smartphones, 40% feature phones, and 30% basic phones.

      In 2014, Samsung announced at their annual meeting, that due to financial reversals in China, they had revised their product mix to concentrate more on Feature and basic phones and had reduced their smartphones to 19% of their product mix. That may have changed slightly changed in 2015 or 2016. . . but not back to the 2013 levels. Samsung has been aggressively going after third-world markets where there is a lack of bandwidth to support large numbers of smartphones or customers to buy higher end smartphones. The third world is a market where basic and feature phones are more competitive for the consumers and that is what Samsung is shipping.

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