$300 Billion Smartphone Industry

We recently posted the latest Q3 2014 mobile phone industry market results, the industry growth remained positive led by proliferation of smartphone segment.

Our latest Market Monitor & Outlook services research reports sheds some more light on the health of the mobile phone industry:

• In terms of volume size, we saw almost under half a billion mobile phones were shipped comprising of more than 300 million smartphone shipment units during Q3 2014
• As a result, smartphones are on track to cross 1300 million mark in shipments this year, an important milestone for the mobile phone industry
• Counterpoint predicts smartphone industry will reach a record US$ 300 billion mark in wholesale shipment revenues for the first time, thanks to rising adoption of smartphones
• This milestone however, won’t be possible without Apple, Samsung as brands which are having significant impact to drive up the ASP either through state-of-art designed products, stronger brand (e.g. iPhone) or significant marketing and industry leading form-factors (e.g. Galaxy Note & S series)
• Apple alone will contribute to roughly a third of the smartphone industry revenues in 2014, As Apple will cross $100 billion mark in iPhone hardware revenues this year, first time in history for any mobile phone manufacturer
• To put into some more context the scale and value Apple or Samsung brings to the industry:
  • In Q3 2014, Apple iPhone 5s alone generated more revenues than all the mobile phone hardware revenues generated by LG + Xiaomi + Sony + Huawei combined
  • Launched in Sep 2014, within just two weeks, iPhone 6 series (6 & 6plus) together generated more than three times revenues generated by Xiaomi’s total smartphone revenues in Q3 2014
  • Meanwhile, Samsung Galaxy S5 alone generated more revenues than all the mobile phone hardware revenues generated by Nokia+Lenovo+Motorola+HTC combined
• This is the power and scale of Apple & Samsung which together contributed to almost three-fifth of the entire smartphone industry revenues
• The position Apple & Samsung are in is a great place to be in to drive adjacent segment revenues but not possible without strong vertical integration
• Apple while has a highly integrated offering from app & services layer to silicon layer, Samsung has yet to grow beyond the hardware stack operating without sticky apps, services, software and intangible experiences which has been the major chink in the armor for the Korean vendor
• In terms of star performers, Xiaomi doubled its revenues year on year
• In terms of geographies, China contributed closer to a fourth of global smartphone industry revenues more than USA which generated almost a fifth of global smartphone revenues in Q3 2014
• The third largest smartphone market India is on track to reach US$10 Billion in smartphone revenues for the first time in 2014 and will surpass Japan in terms of the total mobile phone shipments revenue size in Q4 2014

Overall, 2014 will be a memorable year for mobile phone industry reaching number of important milestones growing in scale and value, thus maximizing opportunities for players in the entire value chain from component manufacturers to software developers.