Smartphone Shipments in Q3 Fall Short of Projections Due to iPhone, Android Misses

Smartphone shipments grew 6.8 percent from a year ago to 355.2 million, marking the second-highest quarter of shipments on record, IDC said. The 3Q 2015 shipments were “slightly below” IDC's previous forecast of 363.8 million units, largely due to “slightly lower than expected iPhone shipments” and flagship Android launches from several top-tier OEMs with price points “outside the consumer sweet spot,” it said. Apple’s 48 million iPhone shipments were short of IDC’s 50.4 million unit forecast, analyst Ryan Reith told us.

Consumers are becoming more aware of “alternative buying options” when buying a smartphone, Reith said. In mature, subsidized markets, carriers are now offering equipment installation plans and early trade-in options. Meanwhile, unlocked off-contract options have grown significantly and are “starting to resonate with consumers,” Reith said. That will put more pressure on Android OEMs with $500-plus phones, he said.

In Q3, vendors tried to “outclass each other in both features and design," leading to "fierce competition" at the high end as companies try to challenge market leaders Samsung and Apple, analyst Anthony Scarsella said. IDC expects the bulk of volume and growth to come from low-end to midrange phones, particularly in emerging markets, he said.

Samsung shipped 84.5 million smartphones in Q3, a 6 percent increase, and global market share was relatively flat at 23.8 percent, IDC said. Apple’s 48 million shipments represented 22 percent growth and its market share rose to 13.5 percent. Huawei posted the biggest Q3 year-over-year increase, 61 percent, to 26.5 million units, giving the Chinese phone maker 7.5 percent market share, up from 5 percent. Lenovo, including Motorola phones, shipped 18.8 million units, an increase of 11 percent, to reach 5.2 percent market share, IDC said. Xiaomi shipments rose to 18.3 million, reaching 5.2 percent market share, it said. Overall, the “others” category shipped 159.1 million units, slipping 2.4 percent, with 44.8 percent share.

Samsung’s September shipments were stronger than normal ahead of the iPhone 6 release as the flagship Galaxy models and sub-$200 Galaxy Core/Grand Prime and J series drove the majority of shipments in key emerging markets, IDC said.

Apple’s 6s and 6s Plus captured upgraders and Android switchers (see 1510280033, this issue) in key markets, including China and the U.S., IDC said. Older iPhone 5S, 6 and 6 Plus models also sold “vigorously” during the quarter on price cuts across all models, IDC said. Apple's recently launched upgrade plan should help drive handset upgrades in developed markets where smartphone saturation continues to increase, it said.

Huawei focused its efforts on the mid-to-high segment, with close to a third of Q3 shipments in that range, IDC said. In addition to its rapid growth in China and Europe, Huawei will need to focus on the U.S., where its presence remains relatively low, IDC said. The recent launch of the premium Nexus 6P device could signal that Huawei “is finally ready to seriously compete in the U.S.,” it said.

Lenovo-branded smartphones have predominantly been a China play, but the brand recently has taken off in the Middle East and Africa and in Central and Eastern Europe, IDC said. Motorola's strength continues to be in North America and Latin America, where its Moto models “hit on attractive price tiers,” it said. China is the “sweet spot” for Xiaomi, although the company continues to pursue Southeast Asia, India and Brazil, IDC said. The Redmi Note 2 was the most popular model among Chinese consumers and drove volumes through Xiaomi's retail location, Mi Home, it said.