Only Xiaomi and Transsion register growth in Q3 smartphone shipments

• Global smartphone market drops just 1% to 293.4m units amid resurging regional demand.
• Samsung is still the leader, followed by Apple and Xiaomi.
• As foldable smartphone options continue to increase, the trend poses a challenge to Samsung’s current dominance.
• The in-house OSs such as Huawei’s HarmonyOS and Xiaomi’s HyperOS are expected to open new revenue opportunities beyond smartphones, such as through IoT and electric vehicles.

Xiaomi and Transsion are the two smartphone vendors to register a year-on-year growth in the shipments in the third quarter of this year.

Sanyam Chaurasia, Senior Analyst at Canalys, said that Xiaomi and the Transsion Group maintained their strong performance from the previous quarter and were the sole brands among the top five to experience growth.

 “Xiaomi regained growth momentum due to successful inventory normalisation in the first half of the year and the launch of the budget-friendly Redmi Number series in emerging markets.”

Meanwhile, he said that Transsion achieved an impressive 40 per cent year-on-year growth, driven by increased shipments in the core African market.

Despite currency fluctuation and import restrictions in these markets, he said that new upgrade demand was intact along with consumers’ adaptation to higher inflation.

“In the Middle East, a growing budget segment demand and a robust regional team in less-affluent markets spurred momentum. Aggressive channel investment expanded Transsion’s presence in Latin American markets alongside their new product portfolio.”

Healthy inventory level

Canalys’ latest research reveals that the global smartphone market fell slightly by 1 per cent to 293.4 million units in the third quarter of this year with vendors pushing new models following a healthy inventory level in second quarter.

Samsung held the pole position and shipped 57.4 million units with a 20 per cent market share, fuelled by its early update of its foldable devices.

Apple followed in second place, shipping 50.0 million units and gaining 17 per cent market share, driven by strong initial demand for the iPhone 15 series with USB-C upgrade.

Xiaomi (including sub-brand POCO) took third place, shipping 41.5 million units, achieving an annual growth of 2 per cent, owing to strong performance in emerging markets. Oppo (including OnePlus) secured the fourth position with 26.4 million units of shipment, capturing 9 per cent market share.

Big demand for fresh offerings

Transsion Group (includes Tecno, Infinix and iTel brands), maintained its fifth position as it continued its strong momentum from the previous quarter and defended its top five position, shipping 26.0 million units.

 “Rising demand for fresh offerings in emerging markets is propelling brands and channels forward as the holiday season approaches,” Chaurasia said.

Lucas Zhong, Research Analyst at Canalys, said that vendors are seeking opportunities to solidify their positioning in the premium market.

“Brands are enhancing their premium segment offerings to expand their utility through design and user interface improvements. The global competition for foldable smartphones is set to intensify. Samsung’s Galaxy Z Flip and Fold 5 series were released two weeks earlier than usual to bolster Q3 2023 revenue and market performance.”

However, as foldable smartphone options continue to increase, he said this trend poses a challenge to Samsung’s current dominance in the same market.

Ecosystem integration

“Oppo strategically introduced the Find N3 and OnePlus Open models in different regions, demonstrating Android brands’ ambition to capture the global foldable market. Learning from demand challenges due to the over-differentiation of the iPhone 14 series, Apple narrowed the gap through the addition of the USB-C and Dynamic Island support to the iPhone 15 and 15 Plus models, resulting in stronger-than-expected volume and supporting the brand’s footprint in the high-end.”

Android brands are striving to improve their “ecosystem integration” to compete with iOS. 

Zhong said that consumers are willing to switch brands for better integration, leading brands to develop their own in-house operating systems to demonstrate R&D capabilities and bolster brand image.

For example, Huawei’s Mate 60 series boasts its in-house Kirin SoC and HarmonyOS to enhance integration while Xiaomi’s HyperOS also stands out for improving connectivity across multiple devices.

“These in-house OSs are expected to open new revenue opportunities beyond smartphones, such as through IoT and electric vehicles. However, the key to the success of in-house OS lies in providing unique and compelling experiences to consumers.

“To maintain user loyalty and profits in the evolving market, vendors must invest in collaborative R&D for both software and hardware and focus on interconnecting features that give them a competitive edge,” Zhong said.

However, he said that global smartphone market will witness modest growth in a cautious-looking 2024 and vendors will close 2023 with a relatively healthier inventory level, providing space to rebuild their stock in preparation for potential demand resurgence.

“Vendors should remain flexible and adaptable in their strategies to seize growth opportunities in specific regions. Additionally, close monitoring of end demand in different regions is needed to strategically optimise resource allocation and avoid disruptions. Long-term market growth remains constrained by the extended replacement cycles in major markets.”

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