Smartphones Reach New High as Xiaomi Joins Top Vendors

Global smartphone shipments remained above 300 million units in Q3’14, having reached that point in Q2. According to IDC, new releases and an increased emphasis on emerging markets were key. In total, vendors shipped 327.6 million smartphones, representing 25.2% YoY growth from Q3’13’s 261.7 million units. The figure was also 8.7% higher than the 301.3 million handsets shipped in Q2’14.

“Despite rumours of a slowing market, smartphone shipments continue to see record-setting volumes”, said IDC’s Ryan Reith. “We’ve finally reached a point where most developed markets are experiencing single-digit growth while emerging markets are still growing at more than 30% collectively… [T]he challenge has now become how to make money on devices that are quickly becoming commodity products. Outside of Apple, many are struggling to do this”.

While Samsung and Apple remained the largest vendors in the market, the next three vendors – Xiaomi, Lenovo and LG – were a driving force behind the record volumes. All three of these companies posted growth above the market, with differing strategies. A number of vendors outside the top five also achieved similar results.

Samsung was the market leader, but was the only vendor in the top five to see its shipment volumes fall YoY. The company is seeing competition in every market and slowing demand for its premium models. Mid- and low-end devices drove volume for the quarter and significantly lowered ASPs.

With the launch of the iPhone 6 and 6 Plus, Apple posted its best-ever Q3. Demand was high – 10 million iPhone 6 units were sold during the opening weekend – but there was also sustained demand for the older iPhone 5S and 5C, which represented the bulk of volume.

Xiaomi’s focus on China and adjacent markets moved it into the top five for the first time, with triple-digit growth. The launch of the Mi4 smartphone in August – an alternative to other high-end models – was key to the company’s success. However, it is yet to be seen if Xiaomi can continue its success outside of its home territories.

Lenovo and LG tied for fourth place. Lenovo’s results improved with steady gains both at home (China) and abroad. Non-Chinese shipments rose to 20% of the company’s business in Q3, up from 9% last year. Volumes were driven by low-cost (sub-$100) phones in emerging markets. Meanwhile, LG’s low-cost strategy paid off, as the company passed 15 million shipments for the first time. Its F- and L-Series phones were well-received in both emerging and developed regions. The company also maintained its presence in the high-end market with the G3.