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Analyzing the world's 14 biggest handset makers in Q2 2013

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The numbers are in, and it's time to make sense of the data. ABI Research's Michael Morgan checks out the world's 14 largest branded cell phone makers in the second quarter of 2013, providing sales data as well as insight into their strategy and competitive position in the market.

Though most research firms only list the market's top five handset makers, ABI lists a full top 14 (and the firm is providing shipment numbers for all of the vendors listed).

A few notes: ABI's numbers represent "sell in," or phone shipments into the retail channel, rather than "sell out," or sales to consumers. Further, ABI's ranking only counts phones that carry the manufacturer's brand. Therefore, phones that bandy a carrier's logo without a hint of which company actually built the device are not counted.

And see ABI's first quarter 2009 rankingssecond quarter 2009 rankings , third quarter 2009 rankingsfourth quarter 2009 rankingssecond quarter 2010 rankingsthird quarter 2010 rankingsfourth quarter 2010 rankingsfirst quarter 2011 rankingssecond quarter 2011 rankingsfourth quarter 2011 rankingsfirst quarter 2012 rankingssecond quarter 2012 rankingsthird quarter 2012 rankings, fourth quarter 2012 rankings and first quarter 2013 rankings.

(And click here for a look at the second quarter earnings season, and here for a list of the top U.S. wireless carriers in the second quarter.)

Second quarter 2013 market share by OEM

OEM shipments from first quarter 2010 to the second quarter 2013

Overall smartphone shipments vs. non smartphones

Second quarter OEM shipments by handset type

Analysis from ABI's Michael Morgan

Rank Vendor 2Q 2013 shipments (millions of units) Analysis
1 Samsung 114.0  
Q2 was Samsung's sixth consecutive quarter as the worldwide leader in handset and smartphone shipments. Sequential shipments growth was minimal due to seasonality and slowing feature phones sales. While the Galaxy S and the Note lines of devices continue to lead the global market, Samsung is increasingly looking to boost the performance of its mid- and low-cost smartphone business. ABI Research believes that Samsung will have a very difficult battle ahead as it tries to fend off local OEMs that are stealing Samsung market share in China. 
2 Nokia 61.1 Q2 represents the last quarter that Nokia will ship Symbian based smartphones (note : ABI does not consider Asha devices as smartphones). With Nokia's switch to Windows Phone completed, it is clear the Nokia's new smartphone strategy has a long way to go. Sequentially, Nokia's smartphone ASP decreased 17% while only netting a 20% gain in shipments. ABI Research believes that it will still be important for Nokia to push Windows Phone devices into lower price tiers, but if they cannot do so in a manner that offsets lower ASPs with higher shipments, the effort will be wasted. 
3 Apple 31.2 As the iPhone 5 grows long in the tooth, Apple's smartphone market share dropped to its lowest level in three years (13.6%). While the upcoming iPhone 5S may help spur some new sales, it will be more important for Apple to make a low-cost iPhone if it wants to continue to grow market share. Reports of continued demand for the older iPhone models in emerging markets is a clear sign that these price-sensitive consumers  are less willing to pay top dollar for Apple's best. ABI Research is concerned that Apple may not be able to deliver a successful device at half the cost of its current phones, but doing so will undoubtedly prove that Apple still has its innovation skills intact.
 
4 LG 16.2 LG continued its positive momentum in the smartphone market with 75% percent of its Q2 handset shipments coming from smartphones. LG's popular Optimus series of smartphones continues to deliver a competitive experience a price points slightly below top tier devices of Samsung and Apple. LG's next great test will be competing at the low-end of smartphones where hungry Chinese OEMs have been capturing market share in China and other emerging markets.
5 ZTE 15.1 Despite a drop in handset and smartphone shipments in Q2, ZTE was able to increase its penetration of smartphone shipments to 75%. Like other Chinese OEMs, ZTE felt the pressure of Samsung in its key home market of China. ZTE is expected to continue to push itself up the value chain from low-cost handsets into premium smartphones and further develop its brand strength and recognition. While upmarket movement is a classic strategy, ABI Research believes that ZTE should not move up stream at the expense of its core strength in delivering low-cost products.
6 Huawei 12.9 Huawei faced a shipment decline in Q2 from seasonality and increasing competition from both the high and the low end. While Huawei does have increasing presence in international markets and in particular emerging smartphone markets, it will be increasingly important that it defends its position in China. ABI Research beleives that if Huawei's inherent advantages in China cannot hold against Samsung's marketing budget, there will be little to stop Samsung from pushing Huawei back in other developed markets such as West Europe and North America. Furthermore, if Huawei cannot hold its share against the likes of Coolpad and Xiaomi, Huawei will be in a very tight spot.
7 TCL (Alcatel) 12.1 TCL had an excellent Q2 with handset shipments growing 43% sequentially. However Q2 has often been TCL's best quarter. ABI Research believes that it is more important to note that TCL has increased its share of smartphone shipments from 17% in Q1 to 27% in Q2. 
8 Lenovo 11.3 Leveraging a broad portfolio of smartphone models and distribution relationships from it PC business, Lenovo continues to succeed in China with market share second only to Samsung. Lenovo does have its sights set on the U.S. market in the near future but for now Lenovo is trying to learn how to succeed in emerging markets like Russia, which only account for 3% of Lenovo shipments. To date, Lenovo is the only PC company that has demonstrated any lasting success in the smartphone market, which will be increasingly important as the general PC market continues to dwindle.
9 Coolpad (Yulong) 10.3 Yulong, a subsidiary of China Wireless Technologies has been riding the surge of 3G Android smartphone growth in China with Coolpad-branded smartphones. Fulfilling China's hunger for low cost smartphones has helped this company become one of the top OEMs in China and has also delivered the Quattro LTE device on Metro PCS in the US at an attractive $150 price point.
10 Sony Mobile   9.6 Sony continues to gain in smartphone market share with a portfolio of respectable devices, but it still has a long way to go in capturing mind share in the North American market. Sony gains seem more driven by captalizing on competitor mistakes than through highly differentiated devices or strategies. ABI Research beleives that Sony needs to find a more meaningful way to connect Sony's gaming, music and movie businesses to its delivery of smartphones. Licensing content across regions can be a challenge, and Sony's content ownership needs to be leveraged as a competitive advantage.
11 Blackberry 6.8 Shipments of BlackBerry 10 devices reached 2.8 million in Q2 or 42% of total BlackBerry shipments. Unfortunately, the rapid shift to the new devices also implies a rapid decline in the demand for older OS 7 units, which have until recently delivered reliable service revenues for BlackBerry. ABI Research believes that without the supporting service revenues to rely upon, BlackBerry 10 will need to double in volume to compensate for lost revenues. Unfortunately, this growth is not materializing, and as such, BlackBerry is taking a hard look at its strategic alternatives.
12 HTC 6.6 While the HTC One did offer HTC a good sales bump in Q2, without another great device to follow this up, HTC will likely experience shipment declines in Q3. While HTC CEO Peter Chou says the he will double down on the high end and HTC brand development, ABI Research believes that HTC needs to find a way to make a successful portfolio, not a successful device.
13 Xiaomi 3.8 Xiaomi or MI-One is a small Chinese OEM that began selling low-cost smartphones at the end of 2011. The OEM has a unique sales strategy, whereby 80% of its devices are sold through its online channels saving money on retail locations. The Mi 2 handset sold over 7 million units in the 1H 2013, making it the best-selling handset model in China, beating out the Samsung S4 and the iPhone. The Mi 2S follow up device launched in April already has 7.5 million orders waiting to be fulfilled (!). Considering the MI 2S has specs that are competitive with the Galaxy S4, but at half the price, it is no surprise why these "millet" phones are so popular in China.
14 Motorola 3.5 Q2 could be considered the quarter that Motorola cleared out its old device pipes to get ready for the its new "Google-designed" devices. The newly announced Moto X device does show some ingenuity and unique thought around what an Android OEM should be doing, yet the new Motorola devices will have much to prove. Luckily, Google is willing to support Motorola with a reported $500 million marketing budget for the new devices. ABI Research is not convinced that "Made in the U.S.A." and some gesture/voice UI innovations are game changers, and there is a risk that this new UI approach could end up like Apples Siri: interesting at first but not used in the long run.

 

The raw data

2013 Q2 Handset Shipment Market Share by OEM

Samsung 27.3%
Nokia 14.6%
Apple 7.5%
LG 3.9%
ZTE 3.6%
Huawei 3.1%
TCL (Alcatel) 2.9%
Lenovo 2.7%
CoolPad (Yuloong) 2.5%
Sony Mobile 2.3%
Blackberry 1.6%
HTC 1.6%
Xiaomi 0.9%
Motorola 0.8%
Other 24.7%

 

Handset Shipments by Vendor
Vendor 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013
Nokia 107.8 111.1 110.4 123.7 108.5  88.5 106.5 113.5  82.7  83.7  82.9  86.3  61.9  61.1
Samsung  64.3  63.8  71.4  80.7  70.0  74.0  85.0  93.5  93.8  94.2 102.6 106.5 112.8 114.0
LG  27.1  30.6  28.4  30.6  24.5  24.8  21.1  20.0  13.7  13.1  14.4  15.4  16.2  16.2
Sony Mobile  10.5  11.0  10.4  11.2   8.1   7.6   9.5   9.0   7.3   7.4   8.8   8.7   8.1   9.6
Motorola   8.5   8.3   9.1  11.3   9.0  10.6  12.9  10.3   8.8   8.1   7.3   5.3   3.9   3.5
BlackBerry  10.5  11.2  12.1  14.2  14.9  13.2  11.8  14.1  11.1   7.8   7.4   6.9   6.0   6.8
Apple   8.8   8.4  14.1  16.2  18.7  20.3  17.1  37.0  35.1  26.0  26.9  47.8  37.4  31.2
HTC   3.3   5.4   6.8   9.1   9.7  12.1  13.2  10.1   6.7   8.3   7.1   6.1   4.5   6.6
Huawei   6.1   6.7   6.9   7.7   9.1  11.9  14.2  16.3  10.5  10.8  12.1  15.0  14.2  12.9
ZTE   8.0   9.9   8.6   9.6  15.2  19.6  18.9  20.0  18.9  19.7  17.6  20.8  16.9  15.1
TCL (Alcatel Mobile Phones)   2.9   7.6   9.0  12.5   7.7   8.9   9.4   8.1   7.8  10.8  10.5  13.4   8.5  12.1
Lenovo - - - -   0.8   0.9   0.9   1.1   2.3   6.8   6.9   9.5   7.6  11.3
CoolPad (Yulong) - - - - - - - -   2.9   3.2   6.1   7.8   9.3  10.3
Xiaomi - - - - - - -   0.2   1.3   1.6   2.1   2.2   3.2   3.8
Others  45.3  47.2  59.0  63.1  71.8  88.0  74.3  70.1  59.6  77.0  82.9 101.4  96.4 103.1