According to the recent data compiled by TrendForce, the smartphone shipment for the entire Q2 arrived at 221 million units, which is up 6.6% from Q1 and a 31.4% increase from the same period a year ago. For the entire 2013, the worldwide smartphone shipment is expected to rise by approximately 32% and end at 928 million units.
Due in part to the increasing maturity of smartphones, the availability of free, open source platforms such as Android, and the active measures taken by smartphone makers to lower manufacturing costs, it is now possible to obtain smartphone devices that are priced at less than $US 100. As mid-end smartphones are already able to fulfill the general entertainment and web browsing needs of smartphone users, models priced in the $US 150-450 range are becoming increasingly more popular among consumers. The demand for high end smartphone models, by contrast, is gradually shrinking, and this is in turn limiting the potential profits available to high-end smartphone manufacturers.
Smartphone Industry Leaders' Flagship Models Not Performing as Expected, Samsung Holds Ground Thanks to Success in Mid-End Smartphone Market
During 2Q13, the shipment of Samsung's entire smartphone line arrived at an estimated 71 million units, which is a record high for the entire company. Although sales of the Galaxy S4 ended up falling short of expectations, TrendForce reckons that the Korean company may have still managed to ship a total of 23 million Galaxy S4 handsets. The fact that Samsung was able surpass its quarterly shipment record is mostly attributable to its shipment as well as sales performance in the mid end sector.
Samsung's channel and brand marketing campaign efforts have so far paid off especially well in rapidly emerging markets such as China, where the Korean company remains one of the most widely recognized global smartphone brands. Even if Samsung is unable to meet expectations with its newest flagship device, the growing sales of its mid-entry level handsets could still help it maintain a dominant position within the global smartphone stage.
Facing increased competition from legitimate competitors such as Samsung, hTC, SONY, and LG, Apple managed to ship only 22 million iPhone 5 units during 2Q13. The Q2 shipment for Apple's entire iPhone line, on the other hand, ended at 27 million units, a 30% decrease QoQ, while the company's worldwide market share in Q2 dropped to 12.1%. If the new model releases are delayed in 3Q13, Apple's 2H13 sales performances are in danger of worsening.
Four Major Chinese Smartphone Brands Manage to Squeeze into World's Top Ten, Brand Advantage a Key Factor
Benefiting from growing domestic demand, Chinese branded smartphone shipments have risen 44% compared to the numbers in 2012. The four most popular Chinese smartphone brands that are currently gaining a lot of global recognition include Huawei, ZTE, Lenovo, and Coolpad. In 4Q12, Lenovo was a top sales leader in China and managed to claim up to 13.7% of the domestic market, which at the time was close to the amount of market share acquired by Samsung. The situation took a notable turn in 2Q13, when Huawei retook the market lead and shipped a total of 14 million smartphone units. Aside from the domestic regions, nearly 30% of Huawei's smartphones are directed at emerging markets, which include India, Southeast Asia, and Eastern Europe. The stable sales growth in these emerging regions is among the key reasons why Huawei was able to rank third in terms of global Q2 shipments.
In part because of their ability to secure major smartphone components, the first tier Chinese manufacturers' dominance was relatively unaffected by the shortage of memory parts in 2Q13. Similar to Huawei, both Lenovo and Coolpad were able to ship over 10 million smartphone units--more than what some global manufacturers were able to accomplish--thanks to their strong brand image and local channel support. Having made it to the global top ten, the potential of China's top four smartphone brands—Huawei, ZTE, Lenovo, Coolpad—should not be taken lightly.
Third Quarter to be Filled with Numerous New Smartphone Products, Competition among Mid-End Smartphone Makers to Grow More Intense
By the end of the third quarter, Trendforce estimates that the mid end smartphone shipments will grow by approximately 8.6% and arrive at 130 million units. These smartphones are expected to account for more than 50% of all the smartphones shipped globally, and could prove useful for the branded manufacturers hoping to increase their market share. Throughout 3Q13, Android smartphone makers such as Samsung, SONY, hTC, and LG are all expected to release a wider assortment of mid-ranged devices as a means to attract consumers. There's little doubt that the mid end smartphone sector will gain further importance as smartphones become increasingly more mainstream.
In the past, China is known mostly for promoting low to mid end smartphone devices whose prices fall within the range of 800~1500 RMB. As first-tier Chinese manufacturers become more popular, however, smartphone products that are priced above 2000 RMB have also begun to emerge. It is predicted that in 2H13, competition within the mid end smartphone market will grow more intense. Success in this market will be dependent on a variety of key factors, including the ability to make cost-effective products, take advantage of distribution channels, and maintain strong brand image.