© ra2studio dreamstime.com Analysis | January 27, 2016
Huawei led global rise of Chinese smartphone brands in 2015
Global smartphone shipments for 2015 grew 10.3% year on year to 1.293 billion units, among which 539 million units came from Chinese vendors, according to the latest reporting from the global market research firm TrendForce.
Chinese smartphone brands made big gains worldwide in 2015, with their market share reaching a new high of over 40% and their combined annual shipments growing above the global average. Chinese smartphone makers also took seven of the top ten spots in the 2015 worldwide vendor ranking. Huawei in particular edged out Lenovo for the first time to become the No. 3 vendor globally and the leading vendor in China. TrendForce smartphone analyst Avril Wu said: “Chinese vendors together shipped 539 million units in 2015, while Samsung and Apple together shipped a total of 547 million units. Collectively, Chinese vendors were in a close match against the top two global brands. In 2016, TrendForce expects Chinese vendors to take around 45% of the global market share, with their shipments exceeding the combined shipments of Samsung and Apple. This means that nearly one out of two smartphones sold by the top ten vendors this year will come from a Chinese brand. In sum, major international vendors are now facing a tougher market situation.” Samsung suffered its first-ever annual shipment decline in 2015; Apple still shines with stellar results Samsung had a tough 2015. Besides missing its annual shipment targets for Galaxy S6 and Note 5, the top global vendor also saw its global market share fell to 25%, down from 28% in 2014. As Samsung continues to cede grounds to Apple in the high-end market, it has retreated in face of Chinese competition in the mid-range and low-end segments as well. Hence, the vendor’s market share projections were revised downward repeatedly throughout the year. According to TrendForce’s data, Samsung smartphone shipments for 2015 totaled 320 million units. This figure represented an annual decline of 1.8%, a historic first for the South Korean vendor. Apple retained its position as the No. 2 global vendor in 2015 with 227 million iPhones shipped, translating to an annual growth of 17.7% and a 17.5% worldwide market share. Strong sales of iPhone 6 and 6 Plus were a major factor behind the sustained expansion in shipments. The 5.5-inch model of iPhone 6 Plus in particular filled the gap for large-screen smartphone in Apple’s product lineup. The successor model, iPhone 6s, was released in September last year and featured upgraded processor (Apple A9) and 3D Touch technology. However, it has not generated much replacement demand as expected because its outward appearance is just too similar to the preceding iPhone 6. Projections for iPhone 6s shipments over 2016 are already seeing downward revisions, and TrendForce anticipates Apple’s shipment growth for this year to be in the single digit. LG’s smartphone shipments for 2015 were average compared with the impressive results it produced in 2014. Sales of G4, the vendor’s flagship, have been disappointing since its release in the first half of 2015 because the model’s specs are too similar to its predecessor G3. LG’s smartphone shipments began to pick up in the second half of 2015, when it launched its other flagship, V10. Featuring a secondary display and dual front cameras, V10 has been crucial to LG’s shipment recovery. For 2015, LG shipped 68 million smartphones, up 7.9% year on year. Huawei tops Chinese market with shipments surpassing 100 million for the first time; other Chinese vendors also registered large shipment growth Huawei in recent years has invested heavily in R&D. With its semiconductor subsidiary HiSilicon, Huawei is able to make its own mobile processors and accumulate intellectual properties related to mobile chipsets. As a result, Huawei has been able expand into foreign markets while avoiding patent litigations with its competitors. The Chinese vendor has also been able to match major international brands in product quality and features. Huawei currently reserves its in-house mobile processors, the Kirin series, for its high-end smartphones while continuing to collaborate with Qualcomm and MediaTek in the mid-range and low-end markets. Lastly, the vendor has also maintained good relations with telecom operators worldwide. Huawei’s smartphone shipments broke the 100 million unit mark for the first time in 2015, arriving at 108 million units. With a huge annual shipment growth of about 49%, Huawei replaced its compatriot rival Lenovo as the world’s third largest smartphone vendor. The vendor’s shipment target for 2016 is set at 130 million units. Though known for offering products with high cost-performance ratios, Xiaomi was unable to make significant headways in foreign markets during 2015. A major obstacle to Xiaomi’s overseas expansion plan is the lack of intellectual properties, and this problem actually resulted in several of the vendor’s smartphone models being banned in India. Xiaomi’s position in the domestic market is also under threat as other Chinese vendors adopt the same sales strategy it developed. The Mi Note series was an opportunity for Xiaomi to move upmarket, but their sales were lackluster. Beset by these challenges, Xiaomi failed to achieve its annual shipment target of 100 million units. While the vendor’s shipments for 2015 totaled just 72 million units, the year-on-year growth rate reached at 17.8%. The vendor took fourth place in the 2015 global ranking. Lenovo’s smartphone shipments surged in 2014 to almost 92 million units in 2014 on account of its acquisition of Motorola’s smartphone unit. However, the vendor’s shipments for 2015 are estimated to be around 70 million units, which also amount to a year-on-year drop of nearly 24%. The projected results for 2015 indicate that the positive effect of Lenovo-Motorola deal has yet to extend beyond the aggregation of smartphone shipments from both brands. On other hand, Lenovo will carry on with the restructuring of its smartphone business in 2016. By focusing on innovative designs and closer collaboration with Google, the Chinese vendor may have chance for a comeback this year. ----- More information can be found at Trendforce.