Worldwide smartphone production volume totalled around 315 million units in the second quarter, representing an 8.9% increase over the previous quarter and a marginal year-on-year increase of 3.2%.
This is according to the latest report from global market research firm TrendForce, which notes sales gradually recovered after the market endured the off season of the first quarter.
Chinese brands in the second quarter continued to enjoy strong domestic demand generated by telecom operators' smartphone subsidies, says TrendForce. At the same time, it notes, they also benefited from demand pickup in North America and the emerging markets. In sum, Chinese brands have become major growth drivers in global smartphone sales.
"The combined production volume of Chinese brands in the second quarter reached 139 million units, up 13.8% from the previous quarter," says TrendForce smartphone analyst Avril Wu. "For the second straight quarter, the combined volume from Chinese brands was larger than the combined volume of the two leading international brands, Samsung and Apple. Furthermore, the volume growth rates of respective Chinese brands are expected to be above the global average in the third quarter."
Apple vs Samsung
Apple's production volume was supported by sales of iPhone SE, while Samsung saw a slight drop of 5%, says TrendForce.
Apple in the second quarter posted an iPhone production volume of around 48 million units, up 13% from the previous quarter. The market analyst firm says this increase was attributed to the shorter base period and steady sales of iPhone SE, the latest mid-range model in the series. About nine million out the total iPhone units produced during this quarterly period were iPhone SE.
"Sales figures of iPhone SE were not particularly exceptional because Chinese smartphone brands put up strong competition in the mid-range device market by lowering their prices," says Wu. "Nonetheless, iPhone SE has helped prop up sales for Apple before the market launch of the next iPhone."
TrendForce points out Samsung's smartphone production volume in the second quarter dropped slightly by 5% versus the prior quarter to about 77 million units. Before the release of the next flagship models, Samsung is depending on the Galaxy J series, which is noted for having a high cost-performance ratio, to sustain the overall sales, it adds.
Due to strong promotional efforts, sales of Galaxy S7 and S7 Edge were still brisk in the second quarter. The next flagship to be released by Samsung this year is Galaxy Note 7, which aims to attract consumers with cutting-edge hardware (eg, 6GB LPDDR4, a biometric recognition system that scans iris patterns), says TrendForce. The market expects a very tight match between Galaxy Note 7 and the next iPhone release in the third quarter.
LG flagship lags
It adds that sales of LG's flagship, G5, have been average at best. LG's smartphone production volume for the second quarter amounted to around 17 million units. Due to the short base period, LG's production volume grew over 10% quarterly.
"The release of V20, LG's flagship for the second half of this year, will be at the end of the third quarter at the earliest," says Wu. "However, it will face stiff challenges from Samsung and Apple's offerings."
Huawei's smartphone production volume in the second quarter increased 7.4% over the previous quarter, arriving at 29 million units. Huawei is secure in its position as the third-largest brand in the global smartphone market, but its domestic rivals are becoming more aggressive.
The sales of Huawei's flagship P9, which features a dual camera, may fall short of expectations as other Chinese brands release competitive products. Taking this into consideration, TrendForce has made downward correction to projection of Huawei's annual smartphone production volume.
OPPO's and Vivo's smartphone production volumes were exceptionally high in the first quarter and continued to increase in the second quarter, with growth rates respectively at 15% and 8%.
TrendForce expects both brands to maintain strong performances in the third quarter, with quarterly production volume increases exceeding 20%. On the whole, OPPO and Vivo have emerged as clear winners in this year's smartphone market.
According to TrendForce, Lenovo's smartphone production volume in the second quarter benefited from the returning demand in overseas markets. While the brand is having difficulty increasing sales due to competitors' aggressive pricing in the low-end and mid-range segments, it has generated interests with innovative products.
Short base period also benefited Xiaomi in the second quarter, the firm says, adding the brand's quarterly smartphone production volume grew by over 27% to 14 million units.
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