Friday, 29 April 2016 15:19

Global smartphone market totally disrupted by newcomers Featured

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The results of IDC’s latest Q1, 2016 worldwide quarterly mobile phone sales tracker has left many gobsmacked. While year-over-year Samsung stayed on par, iPhone lost 16.3%, Huawei gained 58.4%, and the real winners were BBK owned siblings OPPO at 153.2% increase and VIVO at 123.8%.

I am going to reiterate some personal opinions that I have formed over the past few years to set the scene for the remainder of this report.

  • Android is a cesspool, and the hardest thing is differentiate enough to crawl out of the primordial ooze. Congratulations to Samsung (on maintaining market share via a great range of models), Huawei, OPPO, and Vivo for producing quality and features that people want at various price points they are prepared to pay.
  • The flagship market comprises less than 10% of total sales. The halcyon days of flagship prices all hovering around +/- A$1000 are unsustainable as evidenced by a 44% drop in iPhone sales in Q2 (iTWire article here). But to be fair this is the segment that drives innovation and needs to feed the many teats needed for R&D, marketing, distribution, and retail sales.
  • Growth is in the mid-market where value and features are the main drivers
  • The world is over needing ‘brands’ and is prepared to give the Asian Tigers a go.
  • Android is now as secure as iOS as long as you use a paid anti-virus/malware app.

Disruption comes from being lean, agile and changing business models. OPPO has set out to bring near Flagship models like the R7, R7 Plus, R9 and R9 Plus to market at mid market prices from A$449 to $699 and mass-market models like the F1 from $199. Even its new flagship Find series (yet to be released) will sit somewhere between $700-$800 for what looks to be one of the most technologically advanced phones yet.

Top Five Smartphone Vendors, Shipments, Market Share and Year-Over-Year Growth, Q1 2016 Preliminary Data
 (Units in Millions)

Vendor

1Q16 Shipment Volumes

1Q16 Market Share

1Q15 Shipment Volumes

1Q15 Market Share

Year-Over-Year Change

Samsung

81.9

24.5%

82.4

24.6%

-0.6%

Apple

51.2

15.3%

61.2

18.3%

-16.3%

Huawei

27.5

8.2%

17.4

5.2%

58.4%

OPPO

18.5

5.5%

7.3

2.2%

153.2%

vivo

14.3

4.3%

6.4

1.9%

123.8%

Others

141.5

42.3%

159.8

47.8%

-11.4%

Total

334.9

100.0%

334.4

100.0%

0.2%

Source: IDC Worldwide Quarterly Mobile Phone Tracker, April 27, 2016.

“We’re thrilled that OPPO’s devices and user experience continue to delight people around the world,” said Sky Li, OPPO Vice President and Managing Director of International Mobile Business. “Savvy consumers are increasingly aware of the innovative features and craftsmanship that OPPO commits to providing, and as we continue to grow, we hold onto the values that brought us this far – listening to users closely so that we can bring them products they’ll love.”

The first quarter of 2016 saw the release of OPPO’s latest devices, the R9, and R9 Plus. In Australia, the R9 will go on sale through JB Hi-Fi stores from May 9th, with the R9 Plus following in June.

OPPO Australia, CMO, Michael Tran believes recent developments will mean OPPO can follow suit in locally.

“What’s interesting about the research is that the size of the market has remained relatively stable, but OPPO’s market share has more than doubled,” said Tran. “Locally we’ve just secured a national retail agreement with JB Hi-Fi and will soon be introducing the R9, so we’re confident of growing market share locally.”

The R9 improves on all of the strengths of previous entries in the R series, featuring powerful hardware, eye-catching design, and OPPO’s patented, industry-leading low-voltage VOOC Flash Charge technology. Similar on specs to many flagship devices, the OPPO R9 will retail at a fraction of the price, $599.

2015 saw OPPO break into the top-ten global smartphone brands for the first time. At the close of the year, in which OPPO sold 50 million units, the company was ranked number eight globally. Its growth was propelled by devices offering unique, industry-leading features, such as VOOC Flash Charge and a superb photography experience, as well as OPPO’s renowned build quality and design.

ITWire has been following OPPO’s Australian ambitions and IDC’s news of its fourth placing globally is not surprising.

As previously mentioned OPPO and VIVO (and One Plus) are owned by BBK - if you combine these brands unit market share the company has well exceeded Huawei and is nipping very closely at Apple’s heels.

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Ray Shaw

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Ray Shaw [email protected]  has a passion for IT ever since building his first computer in 1980. He is a qualified journalist, hosted a consumer IT based radio program on ABC radio for 10 years, has developed world leading software for the events industry and is smart enough to no longer own a retail computer store!

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