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Chinese Vendors Outpace the Market as Smartphone Shipments Grow 23.1% Year over Year in the Second Quarter, According to IDC

The worldwide smartphone market grew 23.1% year over year in the second quarter of 2014 (2Q14), establishing a new single quarter record of 295.3 million shipments, according to preliminary data from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker. Following a very strong first quarter, the market grew 2.6% sequentially, fueled by ongoing demand for mobile computing and an abundance of low-cost smartphones. Second quarter shipments were in line with IDC's forecast and all expectations are that the market will continue apace in the second half of the year and surpassing 300 million units for the first time ever in a single quarter in 3Q14.

"A record second quarter proves that the smartphone market has plenty of opportunity and momentum," said Ryan Reith, Program Director with IDC's Worldwide Quarterly Mobile Phone Tracker. "Right now we have more than a dozen vendors that are capable of landing in the top 5 next quarter. A handful of these companies are currently operating in a single country, but no one should mistake that for complacency – they all recognize the opportunity that lies outside their home turf."

Despite a challenging quarter for Samsung, and to a lesser extent Apple, the strong market demand boosted results for most smartphone vendors. Emerging markets supported by local vendors are continuing to act as the main catalyst for smartphone growth. Among the top vendors in the market, a wide range of Chinese OEMs more than outpaced the market in 2Q14. By far the most impressive was Huawei, nearly doubling its shipments from a year ago, followed by another strong performance from Lenovo.

"As the death of the feature phone approaches more rapidly than before, it is the Chinese vendors that are ready to usher emerging market consumers into smartphones. The offer of smartphones at a much better value than the top global players but with a stronger build quality and larger scale than local competitors gives these vendors a precarious competitive advantage," said Melissa Chau, Senior Research Manager with IDC's Worldwide Quarterly Mobile Phone Tracker.

Smartphone Vendor Highlights:

Samsung saw the Galaxy S5 ship millions of units this quarter, despite the criticisms leveled at it, while S4 and even S3 volumes remained strong as more affordable alternatives. Collectively Samsung lost 7% market share compared to a year ago, despite having one of the largest smartphone portfolios of all OEMs. To maintain its position at the top, Samsung will need to focus on building momentum in markets dominated by local brands.

Apple's second quarter is always its seasonal low of the year, but even more so this time in advance of the iPhone 6, with consumers holding their collective breath for the long-awaited bigger screens. Apple enjoyed continued success in the BRIC markets, a good sign that it is building its footprint in emerging markets. Given the pent-up demand, the third quarter could be a drought or a flood, depending on the timing of the next launch.

Huawei's story centered on 4G LTE pick up, particularly in China, as all three national carriers subsidized 4G handsets like the P7 to encourage consumers to upgrade from 3G. Outside of China, large volumes of its lower-cost Y series fueled growth across most regions. The company continues to focus on broadening its global reach and the 2Q14 results show that the momentum is undoubtedly there.

Lenovo had a record quarter in China despite tremendous pressure from local brands. During the quarter, Lenovo saw increased success from the A788T, as well as the 3G A388T. And while its Motorola acquisition is undergoing approval, Lenovo continued to gain traction in international markets. While less than 5% of Lenovo's shipments were registered outside of China in the second quarter of 2013, this share nearly tripled in 2Q14, with emerging markets, particularly BRIIC countries, picking up the largest volumes.

LG volumes were largely driven by its L series, helped by models like the L70, which performed well in many markets including the United States. With the G3 launched at the end of the quarter in Korea, greater volumes are expected to show up in the third quarter.

Top Five Smartphone Vendors, Shipments, and Market Share, Q2 2014 Preliminary Data
(Units in Millions)

Vendor    

2Q14
Shipment
Volume

   

2Q14 Market
Share

   

2Q13
Shipment
Volume

   

2Q13 Market
Share

   

2Q14/2Q13
Growth

1. Samsung     74.3     25.2%     77.3     32.3%     -3.9%
2. Apple     35.1     11.9%     31.2     13.0%     12.4%
3. Huawei     20.3     6.9%     10.4     4.3%     95.1%
4. Lenovo     15.8     5.4%     11.4     4.7%     38.7%
5. LG     14.5     4.9%     12.1     5.0%     19.8%
Others     135.3     45.8%     97.5     40.6%     38.7%
Total     295.3     100%     240.0     100%     23.1%

Source: IDC Worldwide Quarterly Mobile Phone Tracker, July 28, 2014

Note: Data are preliminary and subject to change. Vendor shipments are branded shipments and exclude OEM sales for all vendors. The vendor names here reflect the parent company name, where Microsoft owns Nokia. Motorola shipments will be counted under Lenovo once legal approval is obtained.

In addition to the table above, an interactive graphic showing worldwide unit shipments for the top 5 smartphone vendors over the previous five quarters is available here. The chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic can be found by viewing this press release on IDC.com.

About IDC Trackers
IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools. The IDC Tracker Charts app allows users to view data charts from the most recent IDC Tracker products on their iPhone and iPad.

For more information about IDC's Worldwide Quarterly Mobile Phone Tracker, please contact Kathy Nagamine at 650-350-6423 or [email protected].

About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. In 2014, IDC celebrates its 50th anniversary of providing strategic insights to help clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

All product and company names may be trademarks or registered trademarks of their respective holders.

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