Global mobile phone market up 6% in Q2

IDCDemand for mobile phones continue to grow. In Q2, the worldwide mobile phone market grew six percent year over year, according to the IDC Worldwide Quarterly Mobile Phone Tracker.

Vendors shipped a total of 432.1 million mobile phones in Q2 compared to 407.7 million units in the corresponding quarter of 2012. The Q2 total was also slightly higher than the 428.8 million units shipped in Q1.

The growth in the mobile phone market was partly driven by vendors from outside the Top 5 who experienced torrid shipment growth that outpaced the overall market. Several vendors, including Alcatel and Huawei, had high double- and triple-digit growth rates in Q2 for their Android-based offerings shipped to high-growth countries such as China and India. These vendors from outside the Top 5 accounted for 44.8 percent of the overall shipment volume, up from 42.2 percent in the same quarter one year ago.

In the worldwide smartphone market, vendors shipped 237.9 million units in Q2 compared to the 156.2 million units shipped in the same period last year. This represents 52.3 percent year-over-year-growth, the highest annual growth rate in five quarters. Q2 shipments were up 10.0 percent when compared to the 216.3 million units shipped in Q1.

“The smartphone market is still a rising tide that’s lifting many ships,” said Kevin Restivo, Senior Research Analyst with IDC’s Worldwide Quarterly Mobile Phone Tracker. “Though Samsung and Apple are the dominant players, the market is as fragmented as ever. There is ample opportunity for smartphone vendors with differentiated offerings.”

“Market opportunities exist at all levels, including the high end,” said Ramon Llamas, Research Manager with IDC’s Mobile Phone team. “While Samsung and Apple accounted for significant share of the overall market, they were not the only vendors active in the high end of the market, and recent device introductions and upcoming launches signal more vendors targeting this space. Comparisons will certainly be made to the flagship Galaxy and iPhone models, but clearly the competition refuses to be shut out altogether.

“The opposite end of the spectrum is just as, if not more, interesting,” added Llamas. “Lower-priced smartphones continue to gain traction, but the key for vendors will be to keep prices low while still offering premium devices and services. We fully expect to see large-screen smartphones and other flagship devices establish a presence within the lower-priced smartphone segment as well.”

Smartphone Vendor Highlights

Samsung, on the heels of its Galaxy S4 launch during the quarter, saw its volumes reach new levels and accounted for nearly a third of the entire smartphone market. Not to be overlooked is the continued success of its Galaxy S III smartphones, which saw renewed interest following discounted prices in advance of the Galaxy S4 launch. By the end of the quarter, Samsung more than doubled the total volumes of the next largest vendor, and shipped more units than the next four vendors combined.

Apple posted its second-lowest year-over-year iPhone growth rate in almost four years as some buyers presumably held off on iPhone purchases in advance of an expected next-generation device launch this fall. Nonetheless, the 31.2 million iPhones Apple shipped last quarter was impressive as its flagship iPhone 5 model, which has been in the market for three quarters, was faced with additional global competition in the form of Samsung’s Galaxy S4 and HTC’s critically-acclaimed One models. Apple’s growth is likely to accelerate globally assuming it launches a lower-cost iPhone and continues to penetrate prepaid markets in the quarters to come.

LG sustained its momentum from the first quarter of 2013 with total shipments more than double the volume from a year ago for the second consecutive quarter and staying slightly ahead of the competition to retain the number 3 position. More importantly, the company realized a profit from its steady diet of Android-powered smartphones, a feat that very few Android vendors have been able to realize. Now that LG has reinvigorated its product portfolio with the Nexus 4 and the Optimus G Pro, the company is aiming to branch out further into the high end with its upcoming G2, and into the mass market with its L-Series II and F-Series smartphones.

Lenovo returned to the smartphone Top 5 after a two-quarter absence, reaching double-digit shipments in the process. Its volume for the quarter was driven in large part by shipments to 3G operators in China where it is based. A variety of its LePhone brand family phones, such as the A728t, were among its popular models last quarter. Lenovo hopes to build on its recent success with international diversification efforts that will lead it to regions like Latin America in coming quarters.

ZTE finished among the smartphone leaders for the fourth straight quarter thanks to its success in the Asia/Pacific region. ZTE hopes to remain a smartphone stalwart, which is why it has set a goal of 50 million smartphone shipments this year. The company is trying to reach its goal in part by selling 11 LTE-enabled smartphones. Also, ZTE is selling higher-cost products in a wider variety of countries including India where it recently launched six new smartphones, such as the Grand X, this month.

Top Five Smartphone Vendors, Shipments, and Market Share, Q2 (Units in Millions) 

Vendor

2Q13 Unit Shipments

2Q13 Market Share

2Q12 Unit Shipments

2Q12 Market Share

Year-over-year Change

Samsung

72.4

30.4%

50.3

32.2%

43.9%

Apple

31.2

13.1%

26.0

16.6%

20.0%

LG

12.1

5.1%

5.8

3.7%

108.6%

Lenovo

11.3

4.7%

4.9

3.1%

130.6%

ZTE

10.1

4.2%

6.4

4.1%

57.8%

Others

100.8

42.4%

62.8

40.2%

60.5%

Total

237.9

100.0%

156.2

100.0%

52.3%

Source: IDC Worldwide Mobile Phone Tracker, July 25, 2013

Note: Data are preliminary and subject to change. Vendor shipments are branded shipments and exclude OEM sales for all vendors.

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