Analysts: Smartphone market set to recover in second half after sluggish Q2

samsung galaxy note 7

Growth in global smartphone shipments remained sluggish in the second quarter of 2016 as manufacturers grappled with slowing demand in markets such as China, but forecasts from Strategy Analytics suggest that the market could be set for a rebound in the second half of the year.

Both Strategy Analytics and IDC said global smartphone growth was relatively flat in the second quarter: Strategy Analytics estimated that shipments increased 1 per cent annually to 340 million units while IDC suggested that growth had been only 0.3 per cent to 343.3 million units.

However, Strategy Analytics director Linda Sui said there are emerging signs that the global smartphone market reached a bottom in the first half of 2016, "and the growth outlook for the second half of this year is improving due to multiple big new product launches from Samsung, Apple and others."

IDC also noted that the sequential rate of growth had improved in the second quarter, as shipments were up 3.1 per cent from 333.1 million in the first quarter of the year.

The two analyst firms agreed that Samsung had retained its leading market position with a 22-23 per cent share of the market, and also kept Apple in second place, Huawei in third and Oppo in fourth. However, they disagreed on the fifth position, with IDC awarding that to China-based Vivo and Strategy Analytics to Xiaomi.

Neil Mawston, executive director at Strategy Analytics, noted that Samsung will be able to strengthen its smartphone leadership in the second half of the year, especially if it launches a new Galaxy Note 7 flagship model as expected.

However, Apple continues to face challenges following a 15 per cent drop in iPhone shipments to 40.4 million units in the second quarter.

"Apple's global smartphone marketshare has softened from 14 per cent to 12 per cent in the past year. Apple continues to face iPhone fatigue among consumers and the new iPhone SE model has not been able to stem that trend," Mawston noted.

IDC pointed out that Apple did witness strong sales in both established and emerging markets thanks to the launch of the cheaper iPhone SE.

Anthony Scarsella, research manager at IDC, noted that a majority of vendors, including Apple, have found success with more affordable models compared to their flagship handsets.

"As smartphone prices continue to drop and competition escalates at the high-end, vendors will need to continue to push 'flagship-type' devices at affordable price points to encourage upgrading on a more frequent basis," Scarsella said.

For more:
- see this IDC release
- see this Strategy Analytics release

Related articles:
IDC downgrades smartphone forecast for 2016, sees further decline in tablets sales
Pyramid Research: Smartphone sales in MEA to reach 238m units by 2020
IDC: Russian tablets market falls 8.5% in Q1 2016
IDC: Convertible and detachable tablets prove more popular in Western Europe
GfK: Western Europe sees 6% decline in Q1 smartphone shipments