International Data Corporation (IDC) says only 1.8 million smartphones were shipped in Australia in Q2, 2016 down from 2.2 million units a year ago. The 18% YoY (year-on-year) decline for the overall mobile phone market is the third consecutive quarter of double-digit decline.
96% of phones shipped were smartphones. “The market has reached its saturation point for a while now, and shipments are driven more and more by refresh cycles rather than first-time purchases,” says Bilal Javed, Market Analyst at IDC Australia.
Faced with intense competition, market leader Apple continued to struggle as market share plummeted from 48% in Q1 to 40% in Q2. Recently, Apple experienced its slowest quarter in over two years.
Samsung has number two position with 32.9% up 4.7%. It rode on the success of the highly rated flagship handsets, Galaxy S7 and Galaxy S7 Edge. Features of the S7 such as removable storage, waterproofing, and faster processor grabbed consumer attention and accounted for over 63% of Samsung’s shipments.
{loadposition ray}
“While the Galaxy S7/S7 Edge was locking horns with Apple devices, the refreshed J series (J1, J1 Mini, and J3) along with the still successful Galaxy S5 was Samsung’s answer to the other Android vendors in the low/mid-market space,” says Javed.
Apple’s slowdown has allowed other mid-range vendors to join the playing field. And that is where there has been some controversy. IDC is regarded as the “truth” when it comes to accurate sell-in figures according to Alcatel Australia Boss Sam Skontos – other figures like Kantar are rubbery at best.
Skontos is chuffed at Alcatel’s number 3 spot with 5.4% of the smartphone market as they consolidated their hold on the low-end space. The targeted strategy of pre-paid phones exclusive to telco providers is the key driving force behind Alcatel shipments.
Huawei took the fourth spot with 3.5% market share as they launched the much-anticipated flagship P9 as well as the Mate 8 towards the end of the quarter. However, Huawei’s majority shipments came from Y series models in the sub AU$100 price bracket. Huawei struggles to build momentum as they lack brand awareness amongst Australian consumers.
ZTE rounded out the top 5 in Australia as they push into the market through a variety of channels and attractive price points.
Please note that these figures are for Australia and global sell-in figures will be released soon.
What about the rest?
A major surprise came from OPPO who experienced triple digit growth and could move onto challenging the likes of HTC, Huawei, and LG,” said Javed.
Vendors such as LG Electronics and HTC had a disappointing quarter as the much-hyped flagship LG G5 and HTC 10 respectively did not live up to expectation. Australian consumers are becoming increasingly aware of alternative buying options in smartphones and the lack of innovation, minimal marketing and high price point of the device forced HTC out of the top 5.
What about Q3?
Major launches from Samsung (Galaxy Note7), Apple iPhone 7 and the new Google Nexus device are pending in the coming quarter. “These product launches are likely to return the market to positive growth YoY and shipments are expected to break the 2m barrier,” added Javed.
This makes it even harder for mid-tier vendors that will need to counter with more innovation and provide attractive value propositions to gain market share.
| Top 5 Smartphone Vendor 2016Q2 | 2016Q1 | 2016Q2 | QoQ Growth |
| Apple | 48.4% | 40.4% | -16.5% |
| Samsung | 31.4% | 32.9% | 4.7% |
| Alcatel | 4.3% | 5.4% | 23.6% |
| Huawei | 3.0% | 3.6% | 20.4% |
| ZTE | 2.2% | 3.5% | 62.9% |
Source: IDC Asia/Pacific Quarterly Mobile Phone Tracker 2016Q2