Worldwide smartphone shipments reached 265 million units in 4Q13, showing a growth of 6.5% QoQ and 32.2% YoY, according to TrendForce’s research. Thanks to the recent momentum brought about by Apple’s new iPhones, the proportion of high-end smartphone devices shipped jumped from 35% in 3Q13 to 37% in 4Q13, whereas that for the mid to low-range models (ie. those whose prices fall within the range of US$450~US$150) remained at approximately 50%. For the entire 2013, worldwide smartphone shipments increased by an estimated 33.5% YoY, ending at approximately 945 million units. With smartphone makers ramping up Q4 shipments as a means to fulfill 2013 sales targets and pressures related to inventory digestion mounting, TrendForce projects that the global smartphone shipments will drop by an estimated 5.1% in 1Q14.
Competition between Samsung and Apple Intensifies in High-end Smartphone Market
Despite enjoying noticeable growth in the fourth quarter with an estimated 80 million shipped smartphones units (a 3.8% increase QoQ), the shipment proportion of Samsung’s high-end devices have shown a noticeable decline over the months. In 2H13, the Korean company’s high-end smartphones represented only 38% of its total smartphone shipments, which is down from 50% in 1Q13. The decline is partially attributable to the company’s increased emphasis on mid to low-end smartphones, a decision which caused its profits to be lower than expected in the fourth quarter.
Sales of Apple's iPhones, on the other hand, were remarkably impressive due to the company's decision last quarter to promote the iPhone 5S in China. On the whole, TrendForce projects the Cupertino giant’s Q4 shipments to be around 50 million units, which represents a growth of 47.8% QoQ and 11.2% YoY. The iPhone 5S, in particular, accounts for nearly 70% of all of Apple's shipped iPhones (approximately 34 million units), and is partially responsible for the Cupertino company’s success in China, where its market share grew from 5% to 12%. With the China Mobile version of the iPhones set to be released in 1Q14, Apple's overall market share in the region can be expected to remain stable.
The two noteworthy “dark horses” in the industry who are currently worth paying attention to, according to TrendForce, are SONY and LG. Due to its increased efforts in the field of smartphones and hardware components, SONY has been able to boost its domestic market share to over 20% over the years. Its product shipments, meanwhile, saw a series of noticeable growth since 1Q13, with the total numbers of smartphones shipped reaching an estimated 12 million units in 4Q13, a 1.6% QoQ and 62% YoY increase. In 3Q13, Sony’s global smartphone market share rose to approximately 5%. Benefiting from Google’s Nexus smartphone orders, the other noteworthy dark horse, LG, managed to ship a total of 11 million smartphone units during 4Q13 (2% QoQ and 57% YoY growth). The company's worldwide market share, meanwhile, grew to approximately 4.2%.
Performance of Chinese Smartphone Brands Impacted by Apple and Samsung
Aside from Coolpad, whose smartphones usually cost less than 300 RMB to purchase, all of the other major smartphone brands from the country’s top four have experienced a slight decline in Q3 shipments. One possible explanation for this trend is the weaker than expected replenishment effect during the country's recent holiday period. Another is the rising popularity of foreign brands such as Samsung and Apple following the release of their updated devices in the third quarter.
In the periods ahead, TrendForce believes the influences of domestic brands such as TCL and Xiaomi will be a lot more prominent in the smartphone market. Even though its overall shipment levels are not impressive compared to the first tier manufacturers, the quality and product standard of TCL's smartphone devices have already gained official recognition from Alcatel, and are enabling the Chinese company to earn more and more OEM orders and export opportunities. For Xiaomi, the main strategy will continue to revolve around releasing products with high price performance ratios and devising novelties that surprise consumers. Through effective brand marketing, the company's smartphone shipments have a legitimate shot of eventually approaching 40 million units in 2014.
Despite the continuous decline in smartphone entry barriers, TrendForce notes that the majority of the Chinese smartphone manufacturers' impact is still only visible in the mid to low-end market sectors. In the high-end and foreign markets, the said manufacturers’ influence is significantly less prominent. To exert more impact in the market and gain larger market share, the Chinese manufacturers need to work hard on improving not only their product standards, but also their brand image.