Gartner Announces Global Smartphone Sales Up 7% in Q4 2016
Approaching 1.5 billion units... Samsung faces a void in large-screen product lineup due to the Galaxy Note 7 debacle

IT advisory firm Gartner Inc. announced that global smartphone sales to end users in the fourth quarter of 2016 reached 432 million units, a 7% increase from the same period of the previous year. In the fourth quarter of 2016, Apple overtook Samsung to claim the top spot among global smartphone manufacturers.

Total smartphone sales to end users in 2016 were found to have increased by 5% compared to the previous year, reaching nearly 1.5 billion units.

“Samsung Electronics recorded a decline in sales for the second consecutive quarter,” said Anshul Gupta, a principal research analyst at Gartner. “Samsung’s smartphone sales fell by 8% in the fourth quarter of 2016, and its market share dropped by 2.9% year-over-year.”


Richard Yu, President of Huawei Consumer Business Group, delivering a keynote speech on next-generation intelligent phones at CES 2017 held last January.

“Samsung’s smartphone sales began to decline starting in the third quarter,” said Anshul Gupta, a principal analyst, adding that “the decision to halt production and sales of the Galaxy Note 7 led to a slowdown in sales of Samsung’s smartphone portfolio in the fourth quarter.” He further stated, “The Galaxy Note 7 recall created a void in Samsung’s large-screen product lineup.” Samsung Electronics is also facing fierce competition from Huawei, Oppo, BBK Communication Equipment (hereinafter BBK), and Gionee, which are continuing to grow quarterly in the mid-to-low-end smartphone sector.

Apple, iPhone 7 and iPhone 7 Plus Continue Strong Growth

Apple reclaimed the top spot among global smartphone manufacturers for the first time in eight quarters, but the sales gap between the two companies stood at a record low of only 256,000 units. "The last time Apple held the lead was in the fourth quarter of 2014, a period when the iPhone 6 and 6 Plus, featuring the first large screens, drove sales," said Anshul Gupta, a principal analyst.

The researcher analyzed, “This time, it achieved first place thanks to the continued strong growth of its flagship products, the iPhone 7 and iPhone 7 Plus,” adding, “It also benefited from the weak demand for Samsung smartphones in mature markets such as North America and Western Europe, as well as in some mature Asian markets including Australia and Korea.”


▲ Global Smartphone Sales to End Users by Vendor in Q4 2016 (Unit: Thousand Units)

Huawei, Oppo, and BBK accounted for 21.3% of smartphone sales to end users in the fourth quarter of 2016, an increase of 7.3% year-over-year. Anshul Gupta, a principal research analyst, assessed, “Huawei launched the Mate 9 about a month after the discontinuation of the Galaxy Note 7, and this was an appropriate time to position it as an alternative product.”

Chinese smartphone manufacturers' market share increased by 7%

Huawei's premium smartphone lineup appears to have helped narrow the gap with Samsung in the fourth quarter of 2016. The sales gap between Samsung and Huawei narrowed from approximately 50 million units to 36 million units compared to the same period of the previous year. Anshul Gupta, a principal analyst, stated, "Huawei is fully prepared to gradually close the gap with Samsung, the world's second-largest smartphone manufacturer," adding that "the Mate 9, equipped with Amazon's AI voice assistant Alexa, is scheduled to be released in the U.S. market in the first quarter of 2017."


▲ Global Smartphone Sales to End Users by Manufacturer in 2016 (Unit: Thousand Units)

Oppo maintained its position as the number one seller in China during the fourth quarter of 2016 with smartphones equipped with high-performance front cameras and fast charging capabilities. With a strong foothold in China and steady sales growth in other markets, Oppo emerged as the world's fourth-largest smartphone manufacturer.

BBK established itself as a strong mobile brand in China and India by focusing on quality, design, and outstanding brand planning capabilities. In the fourth quarter of 2016, it maintained its second-place position in China, narrowly surpassing Huawei. In addition, BBK rose to become the fifth largest smartphone manufacturer in the world, achieving excellent results such as recording sales growth rates of 278% in the fourth quarter of 2016 and 363% for the entire year of 2016 in India.


▲ Global Smartphone Sales to End Users by Operating System, Q4 2016 (Unit: Thousand Units)

Major Chinese smartphone manufacturers such as Oppo, BBK, Huawei, ZTE, Xiaomi, and Lenovo are expected to continue threatening top smartphone companies in 2017 as they aggressively target markets outside of China. Principal Analyst Anshul Gupta stated, “Samsung must successfully launch its next Galaxy flagship smartphone to continue the momentum from the Galaxy S7,” adding, “It needs to regain customer trust by releasing a new smartphone featuring a large screen and a built-in stylus pen.”

Android OS maintains leading position, capturing 82% of the total market.

In the smartphone operating system (OS) market, Google's Android solidified its leading position by capturing 82% of the total market in the fourth quarter of 2016. Furthermore, for the entire year of 2016, it recorded a market share of 84.8%, an increase of 3.2%, and was found to be the only operating system to achieve year-over-year growth. Anshul Gupta, a principal analyst, stated, "The entry of Google Pixel phones into the market has made the premium Android smartphone lineup even more competitive," adding, "At the same time, with HMD (Nokia) re-entering the market for affordable entry-level smartphones, a fiercer battle is expected in emerging markets."