I thought I’d give our subscribers a quick view of what the landscape is shaping up for with regards to Q2 global smartphone shipments.
The top 5 looks like this:
For Samsung, we believe shipments will be in the low 70m range, 73-74m to be exact. Our Apple estimates are for 53m units sold. Huawei announced 50m smartphones sold in the first half of 2015 which, by doing the math on first quarter sales, means 32m smartphones shipped. Xiaomi announced 34m smartphones shipped in first half of 2015 for first quarter shipments of 20m.
For philosophical reasons, I do not lump Lenovo and Motorolla sales together. If we were to combine the two, Lenovo would be #4 and Xiaomi #5.
Folks love to talk about Xiaomi but it is clear their initial target of 100m smartphones sold in 2015 is unlikely. This is why they recently have publicly changed to a range of 80-100m smartphones as a goal. In all honesty, even 80m may be a stretch at this point. I’ve been telling people to keep an eye on Huawei as a more interesting Chinese player right now than Xiaomi. While I think Xiaomi has the better business model for the long haul, Huawei has quite a bit of assets and large amounts of capital behind them. Huawei is not just a smartphone manufacturer but also owns HiSilicon which is a semiconductor company supplying networking equipment as well as connected devices. And Huawei has an infrastructure business selling global telecom equipment, among other categories. They have many parts of the business to help fuel their R&D. They are well positioned in several categories from a business and revenue standpoint. That is translating into continued aggressive designs in smartphone hardware and globally their sales are increasing faster than Xiaomi’s. Huawei is, for now, the one to watch and perhaps this battle between Xiaomi and Huawei will get more interesting in 2016.
The markets where Huawei is starting to pick up steam is in Brazil (LATAM as a whole), SE Asia, India, and parts of Africa. In many markets, Huawei is now starting to take share from Samsung and compete strongly with local vendors as their branding and quality perception is increasing. As I said, I still think they are the Chinese company to watch right now with global smartphone sales.
Lastly, we still hear tech news sites insinuate these Chinese brands are coming to the US market in force. This is simply not true. The only area where companies like ZTE have any share is with pre-paid, very low-end smartphones. These are areas the carriers don’t really care much about as they make such little money off these customers. No Chinese brand has any relevant share of the post-paid market and I see no signs of that changing. Pre-paid is growing but very, very slowly and I emphasize these are not profitable customers. We remain pessimistic, given what we see about the US smartphone dynamics, that any Chinese branded handset becomes relevant in the US for the time being.