Apple Inc. (NASDAQ:AAPL) Witnesses Strong YoY Growth in Smartphones Per IDC


SAMSUNG ELECT LTD(F) (ADR) (OTCMKTS:SSNLF) maintained its leadership position in the smartphone category in the third quarter. However, the company’s smartphone witnessed a growth rate of only 6.1% to ship 84.5 million units in the third quarter. Overall smartphone sales recorded 6.8% YOY growth to reach 355.2 million units in the September quarter, according to the IDC. Interestingly, Apple Inc. (NASDAQ:AAPL)’s iPhone 6S and iPhone 6S Plus witnessed a record-breaking 13 million units shipment during the launch week.

Weaker Than Expectations

While SAMSUNG ELECT LTD(F) (ADR) (OTCMKTS:SSNLF) and Apple Inc. (NASDAQ:AAPL) retained their respective top two positions, the overall shipment was below the expectations of 363.8 million units. The research firm attributed it to weaker than expected shipments of iPhone and Android flagship launches from several top-tier OEMs as the price points were outside the comfort zone of the consumers.

IDC’s Program Director, Ryan Reith, said that the vendor landscape, as well as, product offerings was unique  since several markets were witnessing the consumer awareness of alternative options to buy the handsets. He pointed out the telecom operators’ extensive offering of equipment installation plans and early trade-in options in the mature, as well as, subsidized markets. Similarly, the number of off-contract, as well as, unlocked offerings has also witnessed a significant jump, and it was slowly starting to resonate with consumers.

Samsung Focused On Premium Device

SAMSUNG ELECT LTD(F) (ADR) (OTCMKTS:SSNLF) focused itself on the premium market with two flagship devices launch in August, the Galaxy S6 edge, as well as, Note5. The company preferred to unveil the two products untraditionally just to beat Apple Inc. (NASDAQ:AAPL)’s iPhone 6S and 6S Plus launch. As a result, the company was able to witness robust September quarter shipments. In respect of the key emerging markets, IDC said that the below $200 devices fueled the majority of the shipments in the third quarter. The brand included in the sub-$200 range was Galaxy Core, Grand Prime, and J-Series. However, its market share slackened to 23.8% from 23.9% in the year-ago quarter.

On the other hand, Apple Inc. (NASDAQ:AAPL) witnessed a strong growth rate of 22.2% better than the industry pace. That meant the unit shipments reached 48.0 million units from 39.3 million units recorded in the previous year quarter, which had the impact of iPhone 6 series launch. As a result, its market share advanced to 13.5% from 11.8% in the prior year quarter. The December quarter will have the full impact of the recent launch of iPhone 6S and 6S Plus. Therefore, the upcoming quarter would be crucial for the tech bellwether. It was primarily focusing upgrades, as well as, Android converts in several key markets like the United States and China. Aside from the new models, the company is also selling its older models vigorously by offering price cuts in all its earlier models like iPhone 5S or iPhone 6 or 6Plus.

Fierce Competition At High-End

IDC’s Research Manager for Mobile Phones, Anthony Scarsella, said that new models translated into tough competition at the high-end. As a result, most of the players were trying to challenge both SAMSUNG ELECT LTD(F) (ADR) (OTCMKTS:SSNLF) and Apple Inc. (NASDAQ:AAPL) to be placed alongside. However, the analyst said that the bulk of volume, as well as, growth will come from low-to-mid-range devices only, especially in emerging markets, though there would be glamour and glitz at the high-end.

China-based Huawei witnessed an impressive 60.9% surge in smartphone units’ shipment to 26.5 million and occupied the third slot. That resulted in boosting its market share to 7.5% from 5% and replaced Xiaomi, which maintained its share at 5.2% with 18.3 million shipments. Lenovo Group Limited (ADR) (OTCMKTS:LNVGY) also improved its share by 20 basis points to 5.3% by shipping 18.8 million units in the third quarter.

Top Five Smartphone Vendors, Shipments, Market Share and Year-Over-Year Growth, Q3 2015 Preliminary Data (Units in Millions)

Vendor

3Q15 Shipment Volumes

3Q15 Market Share

3Q14 Shipment Volumes

3Q14 Market Share

Year-Over-Year Change

Samsung

84.5

23.8%

79.6

23.9%

6.1%

Apple

48.0

13.5%

39.3

11.8%

22.2%

Huawei

26.5

7.5%

16.5

5.0%

60.9%

Lenovo*

18.8

5.3%

16.9

5.1%

11.1%

Xiaomi

18.3

5.2%

17.3

5.2%

5.6%

Others

159.1

44.8%

163.0

49.0%

-2.4%

Total

355.2

100.0%

332.6

100.0%

6.8%

Lenovo + Motorola

18.8

5.3%

25.7

7.7%

-26.8%

 

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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