Market Overview

Gearing up for a Flagship-Filled Holiday Quarter, Smartphone Shipments Grew 2.7% Year-over-Year in the Third Quarter, According to IDC

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According to preliminary results from the International Data Corporation
(IDC)
Worldwide
Quarterly Mobile Phone Tracker
, smartphone OEMs shipped a total of
373.1 million smartphones worldwide in the third quarter of 2017 (3Q17).
Third quarter volumes were up 2.7% year over year, and up 7.4% from the
second quarter. Despite the annual growth being low, the fact that it is
positive leading into the holiday quarter is a sign the industry still
has momentum.

During the lead-in quarter to the holiday season all of the top 5
vendors experienced positive year-over-year growth, with Xiaomi growing
the strongest by more than doubling its sales from this quarter a year
ago. When all was said and done, the top 5 ranking did not change from
the second quarter. Asia/Pacific, excluding China and Japan, performed
the best by far. This market grew double digits, likely as a result of
the continued slowdown in the China domestic market, which was close to
flat year over year in 3Q17.

"As much of the focus has been on the wide range of high-profile
flagship smartphones launched or announced in Q3, it is also important
to look at what is happening with the rest of the industry," said Ryan
Reith
, program vice president with IDC's Worldwide
Quarterly Mobile Device Trackers
. "Collectively, the industry
continues to grow, but at a much slower pace than past years. What is
clear is that the 'Others' outside of the top 5 leading vendors continue
to struggle and the industry leaders are quickly forming two camps.
First, those able to drive significant volumes at the high end, which
right now is basically Samsung, Apple, and Huawei, despite high-profile
launches from Google, Essential, LG, and others. Second, a few other
Chinese OEMs that are making tremendous headway outside of the China
domestic market."

"With an overabundance of high-end flagships launching in the coming
weeks, the fourth quarter will be extremely competitive as vendors will
fight it out to win over holiday shoppers," said Anthony
Scarsella
, research manager with IDC's Worldwide
Quarterly Mobile Phone Tracker
. "Although these premium flagships
will capture all the hype while driving up the average selling price in
the quarter, we still believe a clear majority of shipments will come
from more affordable models across many markets. IDC previously forecast
the fourth quarter to grow at less than 1% year over year as initial
supply constraints surrounding the iPhone X and higher than normal
prices on many flagships could lead to consumers playing the waiting
game until prices come down after the holidays or opt for a more
affordable device."

Smartphone Company Highlights

Samsung once again remained the overall leader in the worldwide
smartphone market with 83.3 million units shipped, up 9.5% from last
year. Samsung's flagship devices continued to perform well in the
quarter as the Korean giant introduced the new 6.3-inch Note8. Samsung's
latest device has witnessed robust initial demand and looks to have
officially put last year's Note 7 fiasco to rest. Despite the success of
the three major flagship models (S8, S8+, and Note8) in the quarter,
Samsung reported that overall revenue decreased within the mobile
division quarter-on-quarter. The decrease was caused by a higher blend
of more affordable models in the product mix as entry-level, and
mid-range devices from the J-Series and A-series continued to drive most
of the shipments in both emerging and developed markets.

Apple's newest iPhones helped drive third-quarter shipments of
46.7 million units, up 2.6% from the 45.5 million units last year. For
the first time in its history, Apple launched three new devices at their
fall event, as the new iPhone X joined the iPhone 8 and 8 Plus in the
Apple line up. With the newly designed X just launching this quarter,
demand for the new iPhone 8 and 8 Plus models was timid compared to
previous launches. Despite all this, the new 8 and 8 Plus brought
wireless charging to the iPhone for the first time and a glass back that
we have not seen since the iPhone 4S. Apple has also improved the
camera, increased the memory, and added a new faster processor via the
new A11 Bionic chip. Older iPhones such as the SE, 6S, and 7 all
received price cuts late in the quarter which will balance the iPhone
portfolio across all price tiers for the holiday quarter. The fourth
quarter from Apple could be the first quarter with something for
everyone as the new X will lead at the high-end and as older discounted
models will offer something for everyone in between.

Huawei continues to gain momentum in the market as the Chinese
giant shipped 39.1 million units, climbing a healthy 16.1% from last
year. The current Mate 9 and P10 flagship models continued to drive
volume at the high end while Huawei's Honor brand also found success
with the more affordable 6X and mid-tier Honor 8. Much like Apple, all
eyes will be on the new devices that launch next month. The new Mate 10,
Mate 10 Pro, and Porsche Design Mate 10 will bring premium bezel-less
designs to the market along with built-in artificial intelligence from
its new chip, the HiSilicon Kirin 970. These new models will challenge
both Apple and Samsung at the top of the market regarding premium
flagship offerings as well as in the race for overall worldwide market
dominance.

OPPO grew shipments 19% year over year in 3Q17 with 30.7 million
smartphones shipped in the quarter. The company remained the number 4
ranked smartphone vendor worldwide and its continued expansion outside
of mainland China continues to be a success. Its widely seen marketing
has proven effective, supported by its full suite of devices offered
across low, mid, and (relatively) high-end. OPPO launched a couple of
new models in India during the quarter, which is a market it continues
to focus heavily on. It also started participating in the online
festival sales along with expanding its exclusive stores. For China, the
R11 (including the R11 Plus) was its most popular model that helped it
to gain momentum in its home market.

Xiaomi remained in the number 5 ranking among worldwide
smartphone vendors, but overall it had the strongest year-over-year
growth. The company more than doubled its shipments from 13.6 million in
3Q16 to 27.6 million in 3Q17. The biggest catalyst for growth was
success in the India market, heavily supported by mega online festival
sales during the month of September. Discounts on most of the models
along with the aggressive bank offers and easy financing options made
Xiaomi's top models attractive for online purchase. In addition to its
online growth, its continued expansion of its preferred partner program
and MI store buildout helped Xiaomi to further cement its position in
the offline space.

Worldwide Quarterly Smartphone Top 5 Company Shipments, Market
Share, and Year-Over-Year Growth, 2017Q3 and 2016Q3
(shipments
in millions of units)
Company     3Q17 Shipment Volume     3Q17 Market Share     3Q16 Shipment Volume     3Q16 Market Share     Year-Over-Year Change
1. Samsung     83.3     22.3%     76.1     20.9%     9.5%
2. Apple     46.7     12.5%     45.5     12.5%     2.6%
3. Huawei     39.1     10.5%     33.7     9.3%     16.1%
4. OPPO     30.7     8.2%     25.8     7.1%     19.0%
5. Xiaomi     27.6     7.4%     13.6     3.7%     102.6%
Others     145.7     39.1%     168.7     46.4%     -13.6%
Total     373.1     100.0%     363.4     100.0%     2.7%
Source: IDC Worldwide Quarterly Mobile Phone Tracker, November 2,
2017
 

Notes:

  • Data is preliminary and subject to change. Some IDC estimates were
    made prior to financial earnings reports.
  • Company shipments are excluding OEM sales for all companies.
  • The "Company" represents the current parent company (or holding
    company) for all brands owned and operated as subsidiary.

In addition to the table above, an graphic showing worldwide market
share for the top 5 smartphone companies over the previous five quarters
is available by viewing this
press release on IDC.com
.

About IDC Trackers
IDC
Tracker
products provide accurate and timely market size, company
share, and forecasts for hundreds of technology markets from more than
100 countries around the globe. Using proprietary tools and research
processes, IDC's Trackers are updated on a semiannual, quarterly, and
monthly basis. Tracker results are delivered to clients in user-friendly
excel deliverables and on-line query tools.

For more information about IDC's Worldwide Quarterly Mobile Phone
Tracker, please contact Kathy Nagamine at 650-350-6423 or knagamine@idc.com.

About IDC
International Data Corporation (IDC) is the
premier global provider of market intelligence, advisory services, and
events for the information technology, telecommunications, and consumer
technology markets. With more than 1,100 analysts worldwide, IDC offers
global, regional, and local expertise on technology and industry
opportunities and trends in over 110 countries. IDC's analysis and
insight helps IT professionals, business executives, and the investment
community to make fact-based technology decisions and to achieve their
key business objectives. Founded in 1964, IDC is a wholly-owned
subsidiary of International Data Group (IDG),
the world's leading media, data and marketing services company that
activates and engages the most influential technology buyers. To learn
more about IDC, please visit www.idc.com.
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