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Holiday quarter bolsters smartphone sales, Huawei making waves

The worldwide smartphone market finished 2015 on a high, with a strong holiday quarter boosting volumes to record levels. The year also saw Huawei making waves in a market usually dominated by Samsung and Apple.

That’s according to IDC, who says shipments surpassed 1.4 billion for the year, due in large part to robust product offerings at numerous price points.

The analyst firm says smartphone vendors managed to ship a total of 399.5 million units during the the fourth quarter of 2015, resulting in 5.7% growth.

For the full year, the worldwide smartphone market saw a total of 1432.9 million units shipped, marking the highest year of shipments on record, up 10.1% from the 1301.7 million units shipped in 2014.

"Usually the conversation in the smartphone market revolves around Samsung and Apple, but Huawei's strong showing for both the quarter and the year speak to how much it has grown as an international brand," explains Melissa Chau, senior research manager with IDC's Worldwide Quarterly Mobile Phone Tracker.

"While there is a lot of uncertainty around the economic slowdown in China, Huawei is one of the few brands from China that has successfully diversified worldwide, with almost half of its shipments going outside of China,” she says.

“Huawei is poised to be in a good position to hold onto a strong number 3 over the next year."

Apple continued to dominate headlines in the quarter as 4Q15 represented its most successful quarter yet with 74.8 million units shipped, up 1% from the 74.5 million shipped last year, IDC explains.

Although the Cupertino-based vendor witnessed minimal growth year over year, its 2015 total market share climbed to 16.2%, up from 14.8% in 2014.

Growth in key markets such as China were up 18%, in which 50% were first-time iPhone owners. Sales in many emerging markets were also up as India saw the biggest increase among the BRIC countries with 76% growth.

According to IDC, Apple accomplished all this despite the increase in average selling price (ASP) for an iPhone. ASPs climbed to $691, up from $687 one year ago, potentially pointing to increased demand for a larger screen and higher capacity models.

"With initial Apple shipment estimates all over the map, Apple assured the public that demand for its premium smartphones is still alive and kicking," explains Anthony Scarsella, research manager with IDC's Worldwide Quarterly Mobile Phone Tracker.

"A new record-setting quarter for Apple indicates consumers continued demand for Apple's latest offerings regarding upgraded hardware and software,” he says.

“Features such as a more widely accepted Apple Pay, increased performance, and the innovative Force Touch technology, continue to set the iPhone apart from the competition.

"To combat Apple at the high-end, competing vendors will need to bring value to consumers to stay relevant in the market," adds Scarsella. "With heavy saturation in many mature smartphone markets such as the U.S., Europe, and China, many vendors have placed a renewed focus on pushing premium-looking mid-tier devices as a new value proposition to consumers in both developed and emerging markets,” he explains.

“Samsung has found success in this segment with its A-Series, and Huawei with its Honor brand. We expect similar devices to appear in 2016 from a variety of vendors that will focus on affordable value without neglecting performance and aesthetics."

Smartphone Vendor Highlights:

Samsung remained the leader in the worldwide smartphone market for the quarter and the year with 85.6 million units shipped in 4Q15, up 14% from last year. The Korean giant finished the year with 324.8 million shipments, which is up only 2.1% from the 318.2 million shipments in 2014. With continuously increasing pressure in the high end from Apple, and at the low end to midrange from Chinese manufacturers Xiaomi, Huawei, ZTE, and others, Samsung faces a multi-front battle.

Apple hit a new high with 74.8 million units shipped, albeit just 0.3 million more than the same quarter one year ago. Continued demand for Apple's iPhone 6S and 6S Plus, particularly in China and the U.S., elevated Apple in 2015 to 231.5 million units shipped in the year. This represents 20.2% growth from the 192.7 million units shipped in 2014. The combination of new innovative features such as Apple Pay and Force Touch, combined with a new Rose Gold color, better performance, and increased speed, helped drive upgrades and attracted Android switchers in record numbers.

Huawei was the biggest winner in the quarter, with the strongest year-over-year growth among the top five vendors at 37%. Huawei also became the fourth mobile phone vendor in history to ship over 100 million smartphones in a year (preceded only by Nokia, Samsung and Apple). Of the key brands originating from China, Huawei has consistently expanded its presence and share on the back of affordable handsets in emerging markets, combined with increasingly competitive flagship models.

Lenovo, just over one year after its acquisition of Motorola, was still trying to find its feet amidst organisational changes while facing greater competition in its domestic market from smaller, local competitors at the low end. The Motorola brand, strong in 2014 in the Americas with the Moto G and Moto X, saw fewer groundbreaking new models in 2015. The Motorola name will be shortened to just "Moto" and be used for high-end devices while the "Vibe" brand from Lenovo will represent the low-end. Lenovo will also put its faith entirely in Motorola as they have elected Moto to design, develop, and manufacture smartphone products going forward.

Xiaomi leaned heavily on the China market for growth, where volumes were still 90% domestic on average compared to international, despite ramping up in India and launching in Brazil. Xiaomi spent 2015 trying to encourage a transition away from the low-end range of models into more midrange models, although the bulk of shipments still rest on low-end volumes from the Redmi line. On the basis of this growth, it was able to widen the gap from number 6, LG.

Top Five Smartphone Vendors, Shipments, Market Share and Year-Over-Year Growth, Q4 2015 Preliminary Data (Units in Millions)

Vendor

4Q15 Shipment Volumes

4Q15 Market Share

4Q14 Shipment Volumes

4Q14 Market Share

Year-Over-Year Growth

1. Samsung

85.6

21.4%

75.1

19.9%

14.0%

2. Apple

74.8

18.7%

74.5

19.7%

0.4%

3. Huawei

32.4

8.1%

23.6

6.3%

37.0%

4. Lenovo

20.2

5.1%

14.1

3.7%

43.6%

5. Xiaomi

18.2

4.6%

16.5

4.4%

10.0%

Others

168.3

42.1%

174.0

46.1%

-3.3%

Total

399.5

100.0%

377.8

100.0%

5..7%

Lenovo + Motorola

20.2

8.1%

24.7

6.5%

-18.1%

Source: IDC Worldwide Quarterly Mobile Phone Tracker, January 27, 2016

Top Five Smartphone Vendors, Shipments, Market Share and Year-Over-Year Growth, Calendar Year 2015 Preliminary Data (Units in Millions)

Vendor

2015 Shipment Volumes

2015 Market Share

2014 Shipment Volumes

2014 Market Share

Year-Over-Year Growth

1. Samsung

324.8

22.7%

318.2

24.4%

2.1%

2. Apple

231.5

16.2%

192.7

14.8%

20.2%

3. Huawei

106.6

7.4%

73.8

5.7%

44.3%

4. Lenovo

74.0

5.2%

59.4

4.6%

24.5%

5. Xiaomi

70.8

4.9%

57.7

4.4%

22.8%

Others

625.2

43.6%

599.9

46.1%

4.2%

Total

1,432.9

100.0%

1,301.7

100.0%

10.1%

Lenovo + Motorola

73.9

5.16%

93.7

7.20%

-21.1%

Source: IDC Worldwide Quarterly Mobile Phone Tracker, January 27, 2016

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