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Smartphone sales in urban China start to decline

Martin Guo

Editor-in-Chief, Kantar China Insights

Mobile 08.02.2017 / 11:00

OPPO R7 Plus

In the fourth quarter of last year, total sales of smartphones in urban China were down from a year ago. Huawei consolidates its leading position. OPPO for the first time makes top 10 model list.

The latest smartphone OS sales data from Kantar Worldpanel ComTech shows that Smartphone sales were down overall in the last quarter of 2016 compared to the final quarter of 2015.

Android accounted for 80.7% of Q4 smartphone sales in urban China, an increase of 9.3 percentage points year-over-year. iOS made up 19.1% of smartphone sales, down from 27.1% in the same period a year earlier.

“iPhone 7 remained the top-selling model in the Chinese market in the last quarter of 2016 at 6.8%. However, its share was smaller than last year’s iPhone 6s, which represented 10.5% of sales in the fourth quarter of 2015,” said Tamsin Timpson, strategic insight director at Kantar Worldpanel ComTech Asia. “Looking at the broader market, there was a shift in popularity. The top 10 list of smartphone models sold in urban China in 2015 consisted of just three manufacturers: Apple, Huawei, and Xiaomi. In 2016, a fourth vendor was added to that list – Oppo.”

Kantar Worldpanel ComTech carries out monthly panel surveys among Chinese urban mobile phone users to monitor the market share changes of various brands. In China, the panel size is 22,000. Panellists were recruited from tier-1 to 5 cities and each year more than 260,000 surveys were conducted. The nature of the research methodology means it can cover the influence of smartphones sold in other countries ended up in China and avoid the confusion caused by unsold phones stocked at distributors’ warehouses.

Though declining in China, iOS is gaining ground in most other countries thanks to the booming sales of iPhone 7 and iPhone 7 Plus.

In the US, iOS accounted for 44.4% of smartphone sales in the fourth quarter of 2016, up from 39.1% in the same period of 2015. Android took 54.4% of sales, down 4.7 percentage points from Q4, 2015.

“iPhone 7 and iPhone 7 Plus were the top sellers for the holiday period, netting their highest share since their release in mid-September, and representing 28% of smartphones sold in the fourth quarter,” said Lauren Guenveur, Consumer Insight Director for Kantar Worldpanel ComTech.

“Despite the expected fallout from Samsung’s problems with the Galaxy Note 7, the company maintained a share of 28.5%, down only 0.9 percentage point from one year earlier. Samsung’s Galaxy S7 flagship device, announced at Mobile World Congress 2016, was the third best-selling phone in the fourth quarter,” she said. “Samsung’s decision to not announce the Galaxy S8 at Mobile World Congress 2017 is not expected to have a large impact on sales, as rumours circulate that the launch will be close to the traditional April date that customers have come to anticipate.”

In the five European countries that Kantar Worldpanel monitors, Samsung was first, with Huawei second.

The five markets include Great Britain, Germany, France, Italy, and Spain.

Android accounted for 50.6% of smartphone sales in Great Britain in the fourth quarter of 2016 vs. iOS at 47.6%. This marked a slight decline for Android from 51.9% in the same period the previous year, while iOS grew nine percentage points.

Dominic Sunnebo, Business Unit Director for Kantar Worldpanel ComTech Europe, said: “Apple achieved its highest loyalty ever in Britain, with 96% of those Apple owners who replaced their phones buying another iPhone.

“More than 50% of iPhone 7 buyers were upgrading from iPhone 6 as the brand’s lifecycle continues to hover around 24 months,” he said. “Beyond Apple and Samsung’s combined 73% share of smartphone sales in the fourth quarter of 2016, the market remained fragmented. Brands like OnePlus, Alcatel, and Google experienced an increase from the prior year, while big names like Sony, LG, and HTC declined.”

Summarizing the year-end performance, Lauren said: “Considering iPhone 7’s top-seller status, the absence of a round headphone jack was not a big issue for consumers – and the fallout from the Galaxy Note 7 battery problems was not a significant factor either.

“As smartphones become commodities, there are fewer compelling reasons to frequently buy a new one, even when holiday discounts are plentiful,” she said. “Technology continuously moves forward, and while smartphones remain at the centre of many new technologies like VR, connected home, and IoT, they are no longer the most exciting devices in the household”.

Source: Kantar Worldpanel

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