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Smartphone market booming, thanks to new vendors and emerging markets

24 Jul 15

The smartphone market is experiencing steady growth, thanks to the flagship phones of key vendors and the increasingly affordable models, according to IDC.

IDC says vendors shipped a total of 337.2 million smartphones worldwide in the second quarter of 2015 (2Q15), up 11.6% from the 302.1 million units in 2Q14. This is the second highest quarterly total on record.

Following an above average first quarter (1Q15), smartphone shipments were still able to remain slightly above the previous quarter thanks to robust growth in many emerging markets, IDC says.

In the worldwide mobile phone market (inclusive of smartphones), vendors shipped 464.6 million units, down -0.4% from the 466.3 million units shipped 2Q14.

"The overall growth of the smartphone market was not only driven by the success of premium flagship devices from Samsung, Apple, and others, but more importantly by the abundance of affordable handsets that continue to drive shipments in many key markets," says Anthony Scarsella,  IDC research manager Mobile Phone team.

Premium handsets sold well in developed markets, however emerging markets, supported by local vendors, drove the momentum that heavily contributed to the second highest quarter of shipments on record, says IDC.

"As feature phone shipments continue to decrease, vendors will continue to attack both emerging and developed markets with competitive smartphones that are both rich in features and low in price," says Scarsella.

"While much of the attention is being paid to Apple and Samsung in the top tier, the smartphone market in fact continues to diversify as more entrants hit this increasingly competitive market," says Melissa Chau, IDC senior research manager Mobile Phone team.

"While the Chinese players are clearly making gains this quarter, every quarter sees new brands joining the market.

“IDC now tracks over 200 different smartphone brands globally, many of them focused on entry level and mid-range models, and most with a regional or even single-country focus," Chau says.

Vendor highlights:

Samsung remained the leader in the worldwide smartphone market but was the only company among the top five to see its shipment volume decline year over year.

The new Galaxy S6 and S6 edge arrived with mixed results as a limited supply of the edge models did not keep pace with the demand for the new curved handset.

Older Galaxy models, however, sold wll thanks to discounts and promotions throughout the quarter.

All eyes will now be on the early release of the pending Note 5 and rumoured S6 edge plus to come this August, IDC says.

Apple's second quarter proved to be its biggest fiscal third quarter ever with 47.5 million units shipped.

The larger screened iPhones along with the rapid expansion of 4G networks continued to drive momentum for Apple in Asia/Pacific.

As smartphone saturation continues to climb in many new developed markets, Apple will look to drive upgrades with refreshed "S" models in the following quarter, says IDC.

Huawei captured the number three position thanks to strong sales that led to a staggering 48.1% year-over-year growth.

Huawei's mid-range and high-end models continue to prove successful with the flagship P8, Honor Series, and Mate 7 handsets delivering sustainable growth both in the consumer and commercial segment.

Huawei will now look beyond Europe and Asia/Pacifc as its latest P8 Lite handset launched in the U.S. (as an unlocked model) for only $250 earlier in the quarter.

Xiaomi continues to find success thanks to both premium and entry-level devices like the Mi Note and Redmi 2 handsets, which helped Xiaomi achieve a 29.7% year-over-year increase.

Xiaomi is now looking to bulk up its IP portfolio to expand its reach even further outside of Asia/Pacific, starting with Brazil.

Lenovo, the third and final Chinese OEM on the list, continued to witness success in many emerging markets with entry-level and mid-range models like the A600 and A7000, sold via Internet retail channels.

The Motorola brand continues to do well with the affordable second generation Moto E and entry-level to mid-range Moto G devices. The pending launches of a third generation Moto X and Moto G look to be on the horizon for the second half of 2015.

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