The U.S. smartphone market jumped 14% year over year in the second quarter as demand for both prepaid and postpaid handsets rebounded after a lackluster 2016, according to Counterpoint Technology Market Research.
American carriers enjoyed nearly 1.25 million net postpaid phone additions during the quarter, the market research firm noted, while Verizon’s 614,000 postpaid net adds marked a “surprise uptick” compared to the same period last year. Those gains came as both Apple and Samsung cemented their status as the two top smartphone vendors in the United States, particularly at the high end of the market.
“Apple-Samsung together have added another percentage of share growing to 60% of the U.S. market. Samsung experienced 20% growth overcoming GS8/8Plus shortages,” Counterpoint Research Director Neil Shah said in a press release. “Apple smartphone volumes grew just over 10% as iPhone promos helped alleviate a postpaid slowdown pre-refresh.”
Both smartphone vendors grew their prepaid businesses in the second quarter as well, Shah continued. Samsung gained market share in the entry-level and mid-range tiers of the industry, while demand for older—and significantly cheaper—iPhone models accounted for nearly 30% of all iPhone shipments during the quarter.
Meanwhile, ZTE continued to make notable progress on its vow to join the top tier of worldwide smartphone vendors. The Chinese company saw its U.S. smartphone shipments increase 36% “with successful prepaid sales within three major carriers and particularly strong growth within national retail channels,” Counterpoint observed.
“This growth can be attributed to a broader portfolio from ZTE catering to most of the consumer segments within the fast-growing low to mid-tier prepaid markets,” the firm noted. “The company offers competitive specs, low price points and variants designed for operators. The range and price points of popular models is broad.”
And just as the overall wireless market has grown increasingly competitive in the last year, the battle over smartphone sales among carriers has become more contested, Counterpoint noted. Verizon was the largest channel in terms of smartphone shipments during the quarter, claiming 22% of all shipments, with T-Mobile following closely behind.
“The gap (between carrier smartphone sales) has narrowed considerably over the past couple of years,” Counterpoint reported. “Bringing back unlimited data plans helped Verizon gain this quarter, the largest carrier by subscribers. AT&T and Sprint have their work cut out as they feel a squeeze from T-Mobile and Verizon postpaid brands as well as healthy growth in (the) prepaid segment from Tracfone and unlocked open channel players.”
The landscape could change even more significantly in the coming months as new high-end phones from Apple, Samsung, Google and others are slated to hit the market in advance of the holiday shopping season. Carriers will surely launch aggressive new promotions and marketing campaigns in an effort to swipe market share in a segment where growth has largely stalled in recent quarters.