Sales of smartphones in emerging markets exhibited highest growth ever, while Western Europe continued to decline
Worldwide sales of mobile phones to end users were flat in the third quarter of 2014, according to Gartner. However, sales of smartphones to end users grew 20.3% to reach 301 million units."Sales of feature phones declined 25% in the third quarter of 2014 because the difference in price between feature phones and low-cost Android smartphones is reducing further," said Roberta Cozza, research director at Gartner. In the third quarter of 2014, smartphones accounted for 66% of the total mobile phone market, and Gartner estimates that by 2018, nine out of 10 phones will be smartphones.
From a regional perspective, emerging markets exhibited some of the highest growths ever recorded with Eastern Europe and the Middle East and Africa achieving the highest increase in the third quarter of 2014, with sales of smartphones growing almost 50% year-over-year. Among the mature markets, the U.S. achieved the highest growth, with an 18.9% increase in the third quarter of 2014, fostered by the launch of the iPhones 6 and 6 Plus. Western Europe saw a decline of 5.2%, the third consecutive decline this year.
"Over the holidays we expect record sales of the iPhone 6 and iPhone 6 Plus, but we should not underestimate the Chinese vendors and local brands," said Annette Zimmermann, research director at Gartner. "Chinese players will continue to look at expanding in overseas emerging markets. In Europe prepaid country markets and attractive lost-cost LTE phones will also offer key opportunities for these brands." Gartner expects sales of smartphones to reach 1.2 billion units in 2014.
Table 1: Worldwide Smartphone Sales to End Users by Vendor in 3Q14 (Thousands of Units)<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Company
3Q14
3Q14 Market Share (%)
3Q13
3Q13 Market Share (%)
Samsung
73212.4
24.4
80356.8
32.1
Apple
38186.6
12.7
30330
12.1
Huawei
15934.9
5.3
11665.7
4.7
Xiaomi
15772.5
5.2
3617.5
1.5
Lenovo
15011.9
5
12882
5.2
Others
142891.6
47.5
111445
44.5
Total
301009.9
100
250297
100
Source: Gartner (December 2014)
Top Smartphone Vendor Analysis
In the third quarter of 2014, three of the top five smartphone vendors were Chinese. Huawei, Xiaomi and Lenovo grew their collective market share by 4.1 percentage points. "With the ability to undercut cost and offer top specs Chinese brands are well positioned to expand in the premium phone market too and address the needs of upgrade users that aspire to premium phones, but cannot afford Apple or Samsung high-end products," said Ms. Cozza. Apple's and Samsung's combined smartphone share totaled 37% in the third quarter of 2014, down 7 percentage points from the same period last year. "The smartphone market is more than ever in flux as more players step up their game in this space," added Ms. Cozza.
Samsung: Sales of Samsung's feature phones and smartphones declined in the third quarter of 2014, and Samsung lost market share in both markets. Samsung's deepest decline came from feature phones, which decreased by 10.8% year-over-year. Demand for Samsung's smartphones weakened mostly in Western Europe and Asia. Samsung's smartphone sales declined 28.6% in China, the biggest market for Samsung.
Apple: Sales of iPhones grew 26% in the third quarter of 2014. With the introduction of two large-screen phones for the first time, the iPhone 6 and iPhone 6 Plus, Apple managed to neutralize the advantage of Android competitors. Gartner expects Apple to experience its biggest ever fourth-quarter sales, with both of its large-screen phones seeing demand exceed supply since their launch.
Although Huawei moved into the No. 3 position in the third quarter of 2014 there is still less than 1 million units between the bottom-three smartphone vendors in the top five.
Xiaomi: Xiaomi made its debut among the top-five smarpthone vendors. It experienced the highest growth of the quarter, with an increase of 336% driven by strong performance in China where it became market leader.
In the smartphone OS market, Android continued to increase its market share with a rise of 22% (see Table 2). On the other hand, Windows lost market share. "Microsoft needs to keep the momentum going from the third quarter, when Windows phone-based devices grew quarter-on-quarter thanks to the introduction of more mid-range devices," said Ms. Zimmermann.
Android
250060.2
83.1
205243
82
iOS
38186.6
12.7
30330
12.1
Windows
9033.4
3
8916
3.6
Blackberry
2419.5
0.8
4401
1.8
Other OS
1310.2
0.4
1407
0.6
Total
301009.9
100
250296.8
100
Source: Gartner (December 2014)
Worldwide mobile phone sales to end users totaled 455.8 million units in the third quarter of 2014 and were flat compared to the same period in 2013 (see Table 3). Mobile phone sales were up in all regions except Latin America (down -7.4%), Western Europe (down - 13.5%) and Japan (down - 1.8%).
"Samsung and Nokia experienced sharp double-digit declines in the third quarter, which let Apple get closer to Nokia, with only 5 million units separating these two vendors," said Ms. Cozza. "The gap is also narrowing between the third and fourth positions, and the fourth quarter could be decisive for Huawei and LG."
Table 3: Worldwide Mobile Phone Sales to End Users by Vendor in 3Q14 (Thousands of Units)
Company
3Q14
3Q14 Market Share (%)
3Q13
3Q13 Market Share (%)
Samsung
94017.8
20.6
117060.8
25.7
Nokia
43134.2
9.5
63058.8
13.8
Apple
38186.6
8.4
30330
6.7
LG Electronics
18976.8
4.2
18046.3
4
Huawei
16324.3
3.6
13574.8
3
TCL Communication
15955.5
3.5
13311
2.9
Xiaomi
15772.5
3.5
3617.5
0.8
Lenovo
15131.5
3.3
12999.8
2.9
ZTE
13857.6
3
13697.3
3
Micromax
10172.4
2.2
6786.5
1.5
Others
174255.4
38.2
163223.8
35.8
Total
455784.7
100
455706.5
100
Source: Gartner (December 2014)
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