Apple takes a bite out of Samsung

dubai - Apple outpaces Samsung as the world's top smartphone vendor for the first time in eight quarters

Apple outpaced Samsung as the world's top smartphone vendor for the first time in eight quarters as global sales of smartphones totalled 432 million units in the fourth quarter of 2016, new data from Gartner revealed.

Apple shipped about 77.04 million smartphones in the fourth quarter, Gartner estimated, just ahead of the 76.78 million shipped by Samsung. That means Apple has 17.9 per cent of the global smartphone market share, narrowly above Samsung's 17.8 per cent. It's the smallest difference Gartner has recorded.

Global sales of smartphones surged seven per cent in the fourth quarter of 2016 compared to the same period in 2015, according to Gartner. In 2016 overall, smartphone sales to end users totalled nearly 1.5 billion units, an increase of five per cent from 2015.

"This is the second consecutive quarter in which Samsung has delivered falling quarterly smartphone sales," said Anshul Gupta, research director at Gartner. "Samsung's smartphone sales declined eight per cent in the fourth quarter of 2016 and its share dropped by 2.9 percentage points year on year."

"Samsung's smartphone sales started to drop in the third quarter of 2016 and the decision to discontinue the Galaxy Note 7 slowed down sales of its smartphone portfolio in the fourth quarter," added Gupta. "The withdrawal of the Galaxy Note 7 left a gap in its large-screen phone range."

Samsung also faced growing competition in the mid-tier and entry-level smartphone segments from Huawei, Oppo, BBK and Gionee, which all grew their sales each quarter.

It has taken eight quarters for Apple to regain the No 1 global smartphone vendor ranking, but the positions of the two leaders have never been so close, with only 256,000 units difference.

"The last time Apple was in the leading position was in the fourth quarter of 2014, when its sales were driven by its first ever large-screen iPhone 6 and 6 Plus," said Gupta. "This time, it achieved it thanks to strong sales of its flagship phones - the iPhone 7 and iPhone 7 Plus; it also benefited from the weakened demand for Samsung's smartphones in mature markets such as North America and Western Europe, and in some mature markets in Asia such as Australia and South Korea."

Huawei, Oppo and BBK accounted for 21.3 per cent of smartphones sold to end-users worldwide during the fourth quarter of 2016, an increase of 7.3 percentage points year on year.

"Huawei introduced Mate 9 during the quarter - within a month of Samsung discontinuing the Galaxy Note 7 - which was good timing to position it as an alternative," said Gupta.

Huawei's premium smartphone offering has helped it to reduce the gap with Samsung during the fourth quarter of 2016, with a difference of 36 million units. In the same period last year, the gap between the two vendors was more than 50 million units. "Huawei is poised to reduce the gap further with the No 2 global smartphone vendor," said Gupta. "Mate 9 with Alexa will start shipping into the US in the first quarter of 2017."

Offering high performance, front-facing cameras and fast charging smartphones led Oppo to maintain the No 1 position in China during the fourth quarter of 2016. Its strong position in China and continued growth of sales in markets outside China have helped Oppo position itself as the No 4 smartphone vendor worldwide.

BBK's focus on quality, design and strong branding initiatives has positioned it as a strong mobile phone brand in China and India. BBK continued its hold on the No 2 position in China and was marginally ahead of Huawei during the fourth quarter of 2016. BBK's strong performance in India, where its sales grew by 278 per cent in the fourth quarter of 2016, and more than 363 per cent in 2016 overall, allowed it to emerge as the No 5 smartphone vendor worldwide. Top Chinese brands such as Oppo, BBK, Huawei, ZTE, Xiaomi and Lenovo are aggressively expanding into markets outside China, where they will continue to disrupt the top smartphone players in 2017.

"Samsung needs to successfully launch the next Galaxy flagship phone in order to continue the momentum Galaxy S7 generated, and win back lost customers by launching a new large screen and stylus-equipped smartphone," said Gupta.

Finally, in the smartphone operating system market, Android extended its lead by capturing 82 per cent of the total market in the fourth quarter of 2016. In 2016 overall, Android also grew its market share by 3.2 percentage points to reach an 84.8 per cent share, and was the only OS to grow market share year on year. Google's operating system holds 81.7 per cent of the market, down one per cent year over year. iOS, however, holds 17.9 per cent, which is up 0.2 per cent compared to the year before.

"The entry of Google's Pixel phone has made the premium Android smartphone offering more competitive, while the re-entry of HMD (Nokia) in the basic [mid-tier] smartphone category, is set to further increase the competition in emerging markets," said Gupta.

- issacjohn@khaleejtimes.com