Market research giant IDC recently announced?surprisingly strong?spring smartphone numbers. Global smartphone volume growth topped expectations handily, coming in at torrid +52% between the second quarter last year and the second quarter this year. This is not good news for the industry ? quite the opposite, in fact. We already know that companies like HTC, Nokia and BlackBerry missed shipment expectations and Samsung?s profitability came in weaker than expected, though Samsung?s volumes were fine. Out of leading brands, only Apple really beat consensus expectations, and that happened because consensus had plunged so low. Even though Apple beat Wall Street?s consensus, its global smartphone market share dropped by a stiff three percentage points.
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That 52% global smartphone volume growth is a?brutal?shock for leading brands because it means that the cheapie vendors are stealing market share a lot faster than industry had previously assumed.
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Lenovo delivered scorching 100%-plus volume growth even as Apple?s?sales volume increased by 20%. ZTE and the ?Others? category both posted roughly 60% volume growth. That ?Others? bundles hot new budget vendors like Karbonn and Spice with tepid old-timers like Nokia and BlackBerry. The fact that the ?Others? category managed to grow by 60% even though it was weighed down by Nokia and BlackBerry implies that the expansion of small Asian vendors must have been phenomenal.
When you miss your sales or profit estimates for the quarter the way HTC, Nokia, BlackBerry and Samsung did, you can only hope that the quarter was weak globally. We now know that the misses from these top brands were worse than they initially seemed; they were caused by big gains of second-tier brands, not an air pocket in demand.
This is a thorny problem, because the smartphone volume growth rate?will likely drop in the coming quarters, while?pricing pressure is only going to increase.
This article was originally published on BGR.com
Source: http://news.yahoo.com/smartphone-market-huge-q2-growth-awful-news-big-165038944.html
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