TrendForce: Global Smartphone Production Reaches 315 Million Units in Q2 2016

According to a report by TrendFroce, a global market research organization, the number of smartphones produced worldwide in the second quarter of 2016 was approximately 315 million units, a quarterly growth of 8.9% and a slight increase of 3.2% compared to the same period last year. Global smartphone shipments gradually recovered in the second quarter after the first quarter, and Chinese brands benefited from subsidies from domestic market operators and rising purchasing power in North America and emerging countries, and have established their role as the engine of global shipment growth.

TrendForce smartphone analyst Wu Yating said that in the second quarter of 2016, the overall shipment momentum of Chinese brand smartphones was strong, with the total production volume reaching 139 million units, a quarterly growth of 13.8%. It has surpassed the total of Samsung and Apple for two consecutive quarters. It is estimated that the growth of Chinese brands in the third quarter will still exceed the global average performance.

Apple benefited from iPhone SE shipments, Samsung's production volume declined slightly by 5%

Apple's iPhone series benefited from a low base in the first quarter and the shipment support of the new mid-range iPhone SE. The overall iPhone production volume in the second quarter was about 48 million, a quarterly growth of 13%, of which the iPhone SE production volume was about 9 million. Wu Yating pointed out that the iPhone SE was subject to fierce price competition from Chinese brands, and its shipment performance was not particularly outstanding, but it still helped to make up for part of the shipment decline before the release of the new generation of iPhones.

Samsung produced about 77 million smartphones in the second quarter, a slight decline of about 5%. Before the release of the next generation flagship phone, Samsung continued to support shipment performance with the high cost-performance advantage of the J (Junior) series, and the Galaxy S7/S7 edge also continued to be popular due to strong promotions. With the release of the new flagship Galaxy Note 7, which is about to attract consumers' attention with the highest component specifications (6GB LPDDR4, iris recognition, etc.), it is expected to set off a fierce competition with the new generation of iPhone in the third quarter.

LG's flagship model G5 had mediocre sales, and the total smartphone production in the second quarter was about 17 million units, but due to the low base in the first quarter, the quarterly growth was more than 10%. Wu Yating said that LG's second-half flagship model V20 will be released at the end of the third quarter at the earliest, but it will definitely be a tough battle in the face of competition from Samsung Note 7 and the new generation of iPhone.

Huawei's production volume faces downward revision, OPPO and vivo show impressive growth

Huawei produced 29 million smartphones in the second quarter, a 7.4% quarter-on-quarter increase, ranking third in the world. However, Huawei's dual-lens flagship P9 is under pressure from other Chinese smartphone brands, and sales may not be as good as expected, leading to a downward revision of full-year production.

Even though the base in the first quarter was very high, the production volume of OPPO and vivo continued to rise strongly in the second quarter, with a quarterly growth of 15% and 8% respectively. TrendForce estimates that the production volume of OPPO and vivo in the third quarter of this year can challenge the quarterly growth of 20%, which can be regarded as the biggest winner this year. Wu Yating pointed out that OPPO and vivo are still focusing on the Chinese market. Channel marketing is the strength of these two companies. They have continued to expand to third- and fourth-tier cities, which has become the main reason for their strong growth momentum this year. In addition, OPPO focuses on product design and is close to user needs, such as the well-received flagship R9. In the first half of this year, vivo released the world's first Xplay 5 equipped with 6GB of memory. In the second half of the year, it is expected to focus on the X7/X7 Plus with stronger camera functions, hoping to capture consumers' attention again.

Lenovo's smartphone sales in overseas markets recovered slightly in the second quarter, but Lenovo continued to be squeezed by other brands' price wars in low-end and mid-range models this year, and it was difficult to boost shipments. As for the world's first Google Tango phone Phab 2 Pro, which successfully attracted attention with its innovative technology, and the Moto Z series of component phones expected to be launched in September, the market response remains to be seen. TrendForce estimates that Lenovo's smartphone production volume in 2016 will be less than 60 million units.

Xiaomi also benefited from the low base in the first quarter, and its production volume in the second quarter reached 14 million units, a quarterly growth of more than 27%, including the shipment contribution of the new model Xiaomi MAX. However, due to fierce competition among brands and the lack of physical channels, TrendForce estimates that Xiaomi's smartphone production volume this year will be slightly less than 60 million units.