Sales of smartphones have grown by over 9% to 380 million units in the first quarter of 2017, with people spending more money on better technology.  This has resulted in a rise in the average selling prices of types of phone, say Gartner Inc.

Chinese Manufacturers Such as Huawei, Oppo and Vivo has seen the positive affects of their strategy to build desirable features at affordable prices. Reported in Gartner’s “Market Share Alert: Preliminary, Mobile Phones, Worldwide, 1Q17”, the Chinese trio combined market share in the first quarter of 2017 accounted for 24%, up 7 percentage points year on year (see Table 1).

“The top three Chinese smartphone manufacturers are driving sales with their competitively priced, high quality smartphones equipped with innovative features,” said Anshul Gupta, Research Director at Gartner. “Furthermore, aggressive marketing and sales promotion have further helped these brands to take share from other brands in markets such as India, Indonesia and Thailand.”

Table 1

Worldwide Smartphone Sales to End Users by Vendor in 1Q17 (Thousands of Units)

Vendor 1Q17Units 1Q17 Market Share (%) 1Q16Units 1Q16 Market Share (%)
Samsung 78,671.4 20.7 81,186.9 23.3
Apple 51,992.5 13.7 51,629.5 14.8
Huawei 34,181.2 9.0 28,861.0 8.3
Oppo 30,922.3 8.1 15,891.5 4.6
Vivo 25,842.2 6.8 14,001.0 4.0
Others 158,367.7 41.7 156,654.2 45.0
Total 379,977.3 100.0 348,224.2 100.0

Source: Gartner (May 2017)

Samsung’s smartphone sales declined 3.1% in the first quarter of 2017. “Although Samsung announced that preorders for the Galaxy S8 and S8 Plus are up 30% year over year, the absence of an alternative to Note 7 and the fierce competition in the basic smartphone segment are leading Samsung to continuously lose market share,” said Gupta. “Sales of iPhones were flat, which led to a drop in market share year over year. Similar to Samsung, Apple is increasingly facing fierce competition from Chinese brands Oppo and Vivo, among others, and its performance in China is under attack.”

Huawei 

 

Huawei edged closer to Apple with smartphone sales amounting to 34 million units in the first quarter of 2017. Despite its P9 and P9 Plus being available for more than a year now, both smartphones continued to sell well, and has positioned Huawei as a dominant brand in the consumer market. “Huawei has now steadily held the third spot in the worldwide ranking of smartphone vendors,” said Gupta. “However, pressure is mounting as its counterparts in China are catching up.”

Oppo is continuing to catch up with Huawei. With a 94.6% increase in worldwide smartphone sales in the first quarter of 2017, Oppo achieved the best performance of the quarter and retained the No. 1 position in China. “Oppo continued to rally sales through a large network of brick-and-mortar retailers, beating market incumbents such as Samsung and Huawei,” said Gupta. Oppo’s strategy — centered on the camera, fast charging and offline retail — has helped it grow smartphone sales in the international market.

Meanwhile, Vivo sold almost 26 million smartphones and achieved a market share of 6.8%, which helped it achieve growth of 84.6% in the first quarter of 2017. “Vivo saw growing demand of its smartphones from the emerging markets in Asia/Pacific, including India, where sales grew over 220% thanks to its increased brand appeal and high-quality smartphones,” said Gupta.

 

In the smartphone operating system (OS) market, the battle is now clearly between Android and iOS. With other OSs struggling for momentum, Android grew its share by 2 percent. Growing acceptance of Chinese brands in the global markets, led by high-quality smartphones, is driving Android OS dominance. Moreover, with Google’s announcement of Android Go — targeted at the entry-level smartphone market — the OS is heading for continued growth (see Table 2).

Table 2

Worldwide Smartphone Sales to End Users by Operating System in 1Q17 (Thousands of Units) 

Operating System 1Q17Units 1Q17 Market Share (%) 1Q16Units 1Q16 Market Share (%)
Android 327,163.6 86.1 292,746.9 84.1
iOS 51,992.5 13.7 51,629.5 14.8
Other OS 821.2 0.2 3,847.8 1.1
Total 379,977.3 100.0 348,224.2 100.0

Source: Gartner (May 2017)

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