Global Smartphone Marketshare Q1 2018; Xiaomi posts 129% growth

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Global Smartphone Marketshare Q1 2018
Global Smartphone Marketshare Q1 2018
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Xiaomi smartphone shipments grew by 129 percent in the first quarter 

Highlights

  • Total year-over-year global smartphone shipments increased 2 percent, reaching 345.5 million units in the first quarter of 2018. However, seasonality took its toll, driving shipment volume down by 11 percent quarter over quarter.
  • Most smartphone manufacturer’s unit shipments decreased in the first quarter of 2018 from the previous year, except Huawei, which grew 14 percent, and Xiaomi, which grew 129 percent. While the market leaders remained the same as the previous year, Xiaomi has now secured the fourth position for two consecutive quarters — pushing Oppo and Vivo to fifth and sixth position in the unit shipment ranking.

IHS Analysis

Since the second quarter of 2017, Xiaomi has been growing ahead of the market. The company’s focus on increasing offline distribution — via additional Mi stores and retail collaborations in China and India — has started to pay off.

Smartphone shipments from Oppo and Vivo, on the other hand, declined for the second consecutive quarter, although both companies delivered double-digit growth until the third quarter of 2017. Saturation in China, their local smartphone market, along with significant hurdles from overseas expansion, caused shipments for both companies to decline.

Oppo and Vivo have established strong brands in China, where they are able to sell both mid-range and high-end smartphone models. However, in emerging areas, like Southeast Asia neither company boasts a strong enough brand to sell more value-added products. As a result, smartphones sold by the two brands internationally were mainly from their low-end lineups, which impacts overall profitability. Oppo and Vivo have started to adjust their portfolio mix towards more profitable models. However, a return to double-digit growth will likely be difficult for these two brands, without international expansion beyond Southeast Asia.

Top two smartphone manufacturers keep negative growth in check

Leading the market, Samsung shipped 78 million smartphones in the first quarter, down 1.3 percent from the previous year. Although smartphone shipment volume declined, Samsung announced its blended average selling price for handsets was $250 per unit, up from $170 at the same time last year. This increase was achieved because Samsung reduced low-end smartphone sales and shifted more devices toward the mid-range and high-end product tiers.

In second place, Apple saw a strong revenue growth for iPhone, despite smartphone market slowdown and shipped 52 million iPhones in the first quarter. But shipments of iPhone X, its new flagship model, declined severely. Apple shipped 30 million units of this super-premium model in the first two months after launch last November, but less than half as many iPhone X units shipped in the first quarter of 2018. Moreover, shipments of other new iPhone models could be disappointing, on the back of Apple’s $50 price increase over the previous model, without any meaningful upgrade. Even so, the price increase pushed the average selling price of iPhone to $728 in the first quarter, up from $655 at the same time last year.

Apple shipped a smaller share of newer iPhone models in its total shipment volume this year, than the company had in previous years. New models launched the second half of the previous year used accounted for more than 80 percent of unit shipments in the first quarter of 2015, accounted for mid-60 percent of the total volume in the first quarter of this year. Apple is now selling nine iPhone models, compared to five models in the first quarter of 2015. As a result, Apple is selling more previous-generation iPhones than before.

Other than the top four manufacturers in China — Huawei, Xiaomi, Oppo and Vivo — shipments from Chinese manufacturers continue to decline. ZTE is facing an especially unclear future for its smartphone business. Last month, the US Department of Commerce activated a Denial Order against ZTE Corporation. If the order stands, it will influence ZTE’s smartphone business globally – affecting the company’s ability to source critical components from the likes of Qualcomm and Google, among other US technology providers.

Even though Huawei shipments grew year-over-year, the company also had a troubled first quarter in the US this year. A planned carrier announcement fell through, and the company seems to have shifted focus to markets where it is performing well already and sees room for further growth.

For brands like Gionee, Meizu, TCL and Lenovo, a rebound seems difficult at this time. Xiaomi continues to grow, and it is targeting similar pricing segments. There are also new manufacturers, such as HMD and Transsion Holdings. HMD has been using its right to license the Nokia brand since 2017 and has steadily increased shipment volume. Tecno, iTel and Infinix from Transsion Holdings are already major brands in Africa, but they are now expanding into the Middle East and Asia .

Global Smartphone Shipments by Manufacturer (Million units)

RankCompanyQ1’18Market ShareYoYQ1’17

1

Samsung

78.0

22%

-1%

79.1

2

Apple

52.2

15%

3%

50.8

3

Huawei

39.3

11%

14%

34.6

4

Xiaomi

29.3

8%

129%

12.8

5

Oppo

25.9

7%

-8%

28.1

6

vivo

21.2

6%

-6%

22.5

7

LG

11.4

3%

-23%

14.8

8

Motorola

8.7

3%

28%

6.8

9

ZTE

8.6

2%

-23%

11.2

10

TCL-Alcatel

3.7

1%

-41%

6.3

Others

67.2

19%

-7%

72.3

Total

345.5

100%

2%

339.2

(Written by Jusy Hong, director, mobile devices, IHS Markit)

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