The International Data Corporation, IDC, have today released preliminary sales information detailing the quarterly sales figure for global smartphones. For 2016, the results are particularly interesting – not so much for the number one and two positions, which remains as Apple and Samsung, but for what is happening lower down in the table.
Overall, the first quarter of 2016 saw a small increase in sales volume compared with 2015. In 2015, 334.4 million smartphones were sold compared with 334.9 million in 2016, an increase of just half a million devices. This marginal increase in sales is seen as evidence that the smartphone market is approaching saturation. Both the number one and two positions, Samsung and Apple respectively, have witnessed a decline in sales over the year with the rest of the market making up for this drop. Looking at Samsung, over the year the IDC is reporting a decline of 0.6% in sales volume and this is despite the Samsung Galaxy S7 launching earlier in the year compared with the Galaxy S6. The IDC notes that the S7 family have sold well as has the less expensive J-family, but it should be worrying for Samsung that this has not stopped the sales decline. Meanwhile, Apple have seen their first decline in sales over the year: Apple sold 16.3% fewer iPhones in Q1 2016 compared with Q1 2015. The IDC has reached the conclusion that the “S” in “iPhone 6S” stands for “Same,” as it believes fewer customers have upgraded to the new iPhone models because there is too little difference. Apple also recently introduced the iPhone SE but it is believed to be too soon for this to have made an impact on sales figures.
It’s from third place that things get more interesting, because Huawei are in the number three spot, showing an impressive 58% increase in sales, year on year. Here, Huawei’s blend of entry level and premium devices is seen as working well across the world, particularly in European and Chinese markets. Huawei has been on something of a charm offensive for some time now and have successfully raised brand awareness thanks to their Android Wear devices and of course the Google Nexus 6P. Recent devices such as the P9 smartphone, with its focus on camera optics, should prove successful. Huawei’s subbrands, Honor and HiSilicon, have also caught headlines around the world, too. Huawei’s global market share moved from 5.2% in 2015 to 8.2% in 2016.
The fourth and fifth placed smartphone vendors of the world are both something of a surprise: fourth place sees OPPO and fifth place is vivo. Both of these Chinese manufacturers have tended to concentrate on their domestic market, although we are seeing these brands across the world: almost 20% of OPPO’s sales in 2015 was to non-Chinese markets. OPPO has worked to bring the smartphone to offline vendors in China, which has helped sales, managing an impressive sales growth of 153% over the year. Meanwhile, vivo have leapt into fifth place on the back of selling 14.3 million smartphones, which represents a 124% increase compared with Q1 2015. vivo’s smartphones are a premium device in China with a focus on high quality audio: one of their best selling devices is the X5Pro, which is also one of their more expensive handsets at $300. OPPO and vivo pushed out Xiaomi and Lenovo, which were previously showing strong sales growth – OPPO moving from 2.2% to 5.5% of the global market share and vivo moving from 1.9% to 4.3%.
Looking at the rest of the market, the IDC’s data shows a 11% decline in sales. This tells us that, although there are still dozens of manufacturers selling devices, consumers’ buying habits are concentrated into a relatively small number of manufacturers. Those IDC reckons that companies manufacturing devices that sell in the sub-$250 bracket, such as Huawei, OPPO and vivo, should perform well during 2016 as consumers look to buy affordable devices. However, given the changes we’ve seen in only a year and how fickle the consumer is, Huawei, OPPO and vivo should absolutely not rest on their laurels or their current gains in market share.