10/28/16

Worldwide Smartphone Shipments Up 1.0% Year over Year in Third Quarter Despite Samsung Galaxy Note 7 Recall, According to IDC

According to preliminary results from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, vendors shipped a total of 362.9 million smartphones worldwide in the third quarter of 2016 (3Q16). Despite the recall of Samsung's Galaxy Note 7, volumes were up 1.0% compared to 3Q15 when vendors shipped 359.3 million units. Sequentially, shipments grew 5.3% from 344.7 million in the second quarter of 2016. (Note: IDC's totals for Samsung exclude Galaxy Note 7 shipments for both recalled and unsold devices in 3Q16.)

According to IDC, vendors shipped 362.9 million smartphones worldwide in Q3 2016 up 1.0% year-over-year.
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"Samsung's market dominance in the third quarter was unchallenged in the short term even with this high-profile Galaxy Note 7 recall, but the longer term impact on the Samsung brand remains to be seen. If the first recall was a stumble for Samsung, the second recall of replacement devices face-planted the Note series," said Melissa Chau, associate research director, Mobile Devices. "In a market that is otherwise maturing, Christmas has come early for vendors looking to capitalize with large-screened flagship alternatives like the Apple iPhone 7 Plus and Google Pixel."

"With Samsung’s Note 7 finally laid to rest, both Samsung and other vendors will need to invest both time and money into properly testing devices to avoid a future incident of this proportion," said Anthony Scarsella, research manager, Mobile Phones. "The recall of the Note 7 represents an industry-wide wake-up call that will undoubtedly lead to a more vigorous testing and certification process moving forward."

The top five vendors remain unchanged from last quarter despite double- and triple-digit growth from the leading Chinese vendors Huawei, OPPO, and Vivo. While Samsung and Apple continue to challenge each other at the top, these upcoming players have delivered value-packed devices that offer consumers top-shelf features at a fraction of the cost compared to the market leaders. Phones like the OPPO R9 and the Vivo X7 have become serious competitors in China and are also witnessing mild success in Western Europe thanks to new athletic sponsorships across various countries. Whether or not these brands can make an impact in the U.S. market remains to be seen, but success will be crucial if aspirations of growth are a top priority.

Smartphone Vendor Highlights

Samsung: The continued success of the Galaxy S7 and S7 edge helped maintain volumes in 3Q16 despite the recall and negative publicity of the Note 7 fiasco. Outside of Samsung's flagship S7, the more affordable J-series of devices continued to steadily drive volume in both developed and emerging markets with flagship-styled devices across various price points and display sizes. Samsung will need to put the Note series to rest as quickly as possible and look to their S7/S7e to captain the ship and keep Samsung users on board for the long haul.

Apple: The new iPhone 7 and 7 Plus drove third quarter shipments of 45.5 million units, down 5.3% from the 48 million units last year. Higher than expected iPhone 7 Plus demand outstripped supply, which should be alleviated through the fourth quarter, helped by new features such as water resistance, faster processing, improved optics, and larger storage capacities. A new "jet black" color option has also proven popular with many carriers and retail partners are still showing the device on back order. IDC believes that the iPhone could witness greater success come next quarter as it stands to likely benefit from the Note 7 recall that took place earlier this month.

Huawei: The Chinese giant shipped 33.6 million units, up a notable 23% from last year. The current dual-camera P9 flagship continued to help with its momentum in China despite the higher price tag compared to some of its rivals. Huawei's Honor brand also found success with the new V8, as the mid-tier device sold well both in and outside of its home country. Outside of China, shipments have grown drastically as China now represents 53% of shipments compared to 60% last year. Huawei continues to maintain a strong brand in Europe and is finding success with the P8 and P9 family, where it is taking away share from Samsung and Apple with competitive specs at lower price points with the Lite versions. Huawei may now have it sights set on the U.S., as we have the New York unveiling of its next Mate series flagship (Mate 9) in early November.

OPPO: In China, OPPO continued to do well largely due to its R9 device that saw continued success in the market and its domestic popularity helped it further close the gap to global number #3, Huawei. OPPO has also pursued an aggressive expansion strategy outside of China, with shipments to the rest of Asia/Pacific tripling since the same quarter a year ago. It particularly experienced good growth in India as it employed more staff to be positioned at storefronts to promote smartphones to consumers.

vivo: On its home turf, vivo plowed more investment into marketing in order to expand its reach via TV advertising, targeting high-tier all the way down to lower-tier cities in China. vivo also held a number of promotional activities and saw growth in China largely due to its X7 series. Its strong coverage in the Tier 3 to Tier 5 cities continued to help it to excel. Outside of China, its presence is still relatively small, but it managed to double its shipments quarter year over year in 3Q16. In India, it grew by increasing its marketing investments to expand its reach via television advertisements


Top Five Smartphone Vendors, Shipments, Market Share, and Year-Over-Year Growth, Q3 2016 Preliminary Data (Units in Millions)
Vendor
3Q16
Shipment
Volumes
 
3Q16 Market
Share
 
3Q15
Shipment
Volumes
 
3Q15 Market
Share
 
Year-Over-
Year Change
Samsung 72.5 20.0% 83.8 23.3% -13.5%
Apple 45.5 12.5% 48.0 13.4% -5.3%
Huawei 33.6 9.3% 27.3 7.6% 23.0%
OPPO 25.3 7.0% 11.4 3.2% 121.6%
vivo 21.2 5.8% 10.5 2.9% 102.5%
Others 164.8 45.4% 178.2 49.6% -7.5%
Total 362.9 100.0% 359.3 100.0% 1.0%
Source: IDC Worldwide Quarterly Mobile Phone Tracker, October 26, 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.
In addition to the table above, an interactive graphic showing worldwide unit shipments for the top 5 smartphone vendors over the previous five quarters is available here. The chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic can be found by viewing this press release on IDC.com.

About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools. The IDC Tracker Charts app allows users to view data charts from the most recent IDC Tracker products on their iPhone and iPad. The IDC Tracker Chart app is also available for Android Phones and Android Tablets.

For more information about IDC's Worldwide Quarterly Mobile Phone Tracker, please contact Kathy Nagamine at 650-350-6423 or knagamine@idc.com.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading media, data and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC.

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