Smartphone Market - Q3 2016 - The Galaxy Note 7 impact

IDC released their preliminary Worldwide Quarterly Mobile Phone Tracker report for Q3 2016. And here is where we stand...

 Worldwide Smartphone sales remain relatively flat with a 1% year over year growth rate.  362.9M units were sold in Q3 of 2016 vs 359.3M in 2015.  This was in spite of the massive recall involving the Samsung Galaxy Note 7.

 Looking at the top 5 vendors...

 Samsung is still #1 worldwide even with a 13.5% decline in unit sales - 72.5M in 2016 vs 83.8M in 2015.  Worldwide market share is 20%.   Sales of Galaxy S7/S7 Edge and the mid range J series made up for some but not all of the Note 7 issues.

 Apple is #2.  As I reported in an earlier post Apple sold 45.5M units - a 5.3% drop from the 48M sold in 2015 and maintains a 12.5% market share.

 The big gains continue to come from the big 3 Chinese players, Huawei, Oppo and vivo.

 Huawei saw unit sales grow 23% to 33.6M units while Oppo and vivo saw triple digit growths of 121.6% (25.3M units) and 102.5% (21.2M units) respectively.  

 The 3 combined sold over 80M units and a 21.8% market share.  The impact of this was really reflected in Apple's Q4 numbers where iPhone sales in "greater china" fell by some 30%.   

 The Chinese competitors are selling directly to the big target market in China at the Average Selling Price (ASP) of $250.   As these sales increase I expect Apple to slide to #3 or even #4 Worldwide in 2017.   Until Apple can come up with a entry/mid level phone at the magic $250 ASP - their sales will continue to slide. Samsung has the popular J series - which is very competitive in that space.

 Looking forward - two big questions arise...

 First - will Apple have a strong Q4.  In previous years, Apple has sold as many as 70M units in Q4 - but not so sure that the iPhone 7 will get there.

 Second - how much brand damage has the Note 7 debacle had on Samsung and how long will it be before it recovers.

 We'll see how next quarter plays out.

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