Chinese Smartphone Makers are Overtaking the Market

We have a new tracking report out this week from the International Data Corporation (IDC). This report is entitled “Worldwide Quarterly Mobile Phone Tracker” and according to IDC, it is designed to fill the demand for detailed information on the total mobile phone and smartphone markets for handset vendors, as well as, software developers, service providers, component suppliers and investors. It provides insightful analysis through quarterly market share data by region.

A breakdown of the report’s technology coverage and data segmentation is as follows:

Technologies and Sub Technologies:

• Device types: feature phone, smartphone
• Vendors: 150+
• Air interfaces: CDMA EV-DO, GSM, GPRS, EDGE, UMTS, HSPA, LTE, TD-SCDMA
• Operating systems, versions and platforms: Android, Windows Phone, Symbian, iOS, BlackBerry OS, Linux, Firefox OS, Tizen
• Generation: 2G, 2.5G, 3G, 4G

Other Model Attributes include:

• Input method (alphanumeric, QWERTY, touchscreen), camera megapixel bands, GPS, Bluetooth, Wi-Fi, TV, Push2Talk, radio, VoIP, music player, video player, Java, BREW, MMS, display, primary memory card, screen size, NFC, dual SIM, application processor information, smartphone tiers
• Channel Splits: retail, telco, direct, e-tailer, others
• Segment Splits: consumer, commercial

The geographical scope of this report covers Asia/Pacific (excluding Japan), Canada, Central and Eastern Europe, Japan, Latin America, Middle East and Africa, the United States and Western Europe.

There has been some speculation lately that the smartphone market may be at a saturation point. Although handset sales for Samsung and Apple are still strong and we will continue to see these two names at the top of quarterly and yearly reports, they haven’t been quite as overwhelming as they have been in the past. In fact, these two companies are beginning to take a little heat from local challengers.

If we are reaching a saturation point, then apparently someone forgot to tell the people buying the smartphones. Preliminary data from IDC’s quarterly tracker shows that the worldwide smartphone market actually grew significantly. There was a 23.1 percent growth year over year in the second quarter of 2014. In fact, it established a new single quarter record of 295.3 million shipments. Expectations are that we could see that number going past 300 million in the next quarter.

So far the first two quarters of 2014 have both shown substantial growth. Part of this could be a representation of the local challengers, they are producing low cost smartphones and this is the segment that is seeing consistent growth, along with an ongoing demand for mobile computing.

"A record second quarter proves that the smartphone market has plenty of opportunity and momentum. Right now we have more than a dozen vendors that are capable of landing in the top 5 next quarter. A handful of these companies are currently operating in a single country, but no one should mistake that for complacency – they all recognize the opportunity that lies outside their home turf." These were the comments made by Ryan Reith, program director with IDC's Worldwide Quarterly Mobile Phone Tracker.

The following chart gives you information concerning the top five vendors:

It seems that a lot of this growth is coming from China. As you can see from the chart, only China-based Huawei and Lenovo outpaced the overall smartphone market. Although this is only preliminary data, IDC sees that emerging markets supported by local vendors are continuing to act as the main catalyst for smartphone growth.

Melissa Chau, who is the senior research manager with IDC's Worldwide Quarterly Mobile Phone Tracker, said "As the death of the feature phone approaches more rapidly than before, it is the Chinese vendors that are ready to usher emerging market consumers into smartphones. The offer of smartphones at a much better value than the top global players but with a stronger build quality and larger scale than local competitors gives these vendors a precarious competitive advantage.