Strategy Analytics: It’s been a slow year for the smartphone industry

29 Oct 2015 | Author: | No comments yet »

Apple, Huawei Rise, Samsung Falls in Q3 Smartphone Share, says Strategy Analytics.

Research firm Strategy Analytics reported today that Apple (AAPL) and China’s privately held Huawei gained share of the global mobile phone market in Q3, while Samsung (SSNLF), Lenovo (LNVGY) and Xiaomi saw their respective share decline. Dubai: Samsung once again remained the overall leader in the worldwide smartphone market with 84.5 million units shipped during the third quarter, up 6.1 per cent from last year, according to industry experts. “Older iPhone 5S, 6 and 6 Plus models also sold vigorously during the quarter thanks to recent price cuts across all models. It was a slow quarter for smartphone sales, with shipments growing 10% to 354 million units, the slowest growth rate in six years, amid maturing markets in China, North America and Europe, according to estimates compiled by Strategy Analytics.

Apple’s recently launched upgrade plan should also help drive handset upgrades in developed markets where smartphone saturation continues to increase,” Ryan Reith, programme director at research firm International Data Corporation. While the three-month period saw record shipments of 355 million, up 6.8 percent year on year, this figure came in slightly below IDC’s high expectations of 363.8 million. A survey by IDC showed global smartphone sales of 355.2 million in the July-September period, up 6.8% from a year ago and the second highest quarterly total on record.

The Korean firm’s semiconductor and display panel divisions were the stand-out performers that, alongside favorable currency rates, contributed to a $6.4 billion (7.39 trillion KRW) profit on revenue of $45.2 billion (51.68 trillion KRW). Still, the firm doesn’t seem too disappointed and credits the near seven percent increase in shipments to fierce competition in the high-end segment, and the growing popularity of the top three vendors: Samsung, Apple and Huawei.

Samsung remained the top vendor, delivering 84.5 million handsets or 23.5% of the total market, followed by Apple’s 48 million which gave the US firm 13.5%. The Samsung phone business, which has struggled to compete with Apple and lower-end players like Xiaomi, accounted for $23.3 billion (26.61 trillion won) of Samsung Electronics’ total revenue. Outside of the key flagship models, sub-$200 (Dh734) devices drove a majority of shipments in many key emerging markets,” said Anthony Scarsella, research manager at IDC. “New flagship models translated to fiercer competition at the high-end for most players as many will try to challenge both Samsung and Apple for a place among the elite.

China’s Huawei cemented its hold on third place with a 7.5% market share and 26.5 million units, followed by Chinese rivals Lenovo and Xiaomi, which each captured slightly more than five percent. While revenue from phones rose by 2 percent quarter-on-quarter and 8 percent year-on-year, thanks to increased sales, its $2.1 billion (2.40 trillion KRW) operating profit was down 13 percent on the previous quarter as a result of price cuts made to the Galaxy S6 and Galaxy S6 Edge and an increase in sales of cheaper devices. IDC analysts said consumers are seeing new buying options including unlocked handsets which can be used on several carriers, and financing plans to pay for the device over time. “The vendor landscape and product offerings are really unique at the moment as many markets are seeing consumers become more aware of alternative buying options when it comes to paying for their smartphone,” said IDC’s Ryan Reith. “In mature and subsidized markets, we now have a wide range of operators offering equipment installation plans), as well as early trade-in options. Samsung estimated that it will maintain the same revenue from smartphones in the next quarter, but it expects things to slow next year in line with the rest of the industry. Despite the rapid growth in China and Europe, Reith said that Huawei will need to focus on the United States where its presence remains relatively low.

Apple, which ranks as the second most popular smartphone manufacturer, sold 48 million iPhone handsets during Q3, up 22 percent compared with this time last year. That’s where its push into wearables and payments — Samsung Pay is now available on all major U.S. carriers, and is adding more bank partners — could come into play. The firm’s partnership to produce Google’s Nexus 6P phone “could signal that Huawei is finally ready to seriously compete in the US,” IDC said.

Huawei entered the top five ranking for the first time in Q2, and so far it’s managed to hold on. “We continue to get feedback that tablet users are holding onto devices upwards of four years,” IDC program director Ryan Reith said in a statement. “We believe the traditional slate tablet has a place in the personal computing world. However, as the smartphone installed base continues to grow and the devices get bigger and more capable, the need for smaller form factor slate tablets becomes less clear.

The three-storey Samsung d’light shop in Gangnam, Seoul, South Korea, is the world’s biggest Samsung shop with an area of 2,000 square metres (21527.82 square feet). This, IDC said, is thanks to the firm’s efforts in the mid- to high-range market, where devices such as the Honor 6 Plus and Ascend P8 have boosted sales. With shipment volumes slowing over four consecutive quarters, the market appears to be in transition.” So far, Windows 10 has not managed to help the situation. These devices only claim a single digit percentage of the overall tablet market, but IDC expects their share to “increase dramatically” over the next 18 months.

The store showcases Samsung’s range of gadgets and electronics including the latest mobile phones and laptop computers. “This new store showcases all of the UAE’s most loved Samsung products in unique and innovative ways. We are delighted to be able to give new and existing customers the best possible experience in a welcoming and interactive environment,” said Deepak Babani, Chief Executive Officer of Eros Group.

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