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14 Jun 2018

EMEA Smartphone Markets Hit Record Value Despite Smartphone Slowdown, Says IDC

LONDON, June 1214, 2018 — The region's smartphone market showed some stability in the first quarter of 2018 in unit terms, while its value grew to exceed its previous first quarter peak result in 1Q15.

The total value of smartphone sales was $29.967 billion, and unit volume was 86.523 million.

"Overall mobile phone shipments in EMEA declined year on year in unit terms, and it may well be that the market is beyond the peak levels registered in 2017," said Simon Baker, program director, Mobile Devices, IDC CEMA. "This is because the resurgence in feature phones in emerging markets, mainly in Africa, seen from the second half of 2016, is now beginning to ebb. The 1Q18 feature phone market was the smallest in six quarters."

The Western European smartphone market continues to contract, and so, perhaps surprisingly, does that in Africa. The Western European smartphone total dropped to 29.213 million in the quarter, 8.2% down on the year before, according to Marta Pinto, senior analyst at IDC Western Europe, while that in Africa was 4.4% down. In comparison the Middle East market was 1.5% up and the market in Central Europe was up 5.6%.

Samsung is maintaining its smartphone market leadership across all of EMEA, though it has a smaller share in Africa than elsewhere.

"Samsung has a very stable position in Western Europe, and with its wide product portfolio it has adjusted to the new realities of the market," said Pinto. "Sales of premium smartphones are growing, and Samsung does the premium model marketing exercise better than most, but consumers are still showing more of a value for money approach than they did. While they want premium models more than they used to, they are often happy to settle for last year's version rather than the latest."

Meanwhile second-placed Huawei is gaining in Europe, and rising strongly in the Middle East. "Huawei's volumes have gone up by a half in the last year," said Baker, "and most rapidly in CEE and the Middle East. The vendor must be considered a strong rival to Samsung, and Samsung must look out, especially in the more profitable European market."

Both vendors are looking over their shoulders on how quickly Xiaomi will become a serious new rival. "All eyes are on Xiaomi in the mobile phone industry as it prepares for an IPO," said Baker. "Having succeeded stunningly well in India, Xiaomi last year focused on Russia as a key element in the next stage in its global expansion on Russia and to a lesser extent Ukraine and Poland, and it continues to do well there. Its share in CEE has subsequently flattened, suggesting further growth may be more difficult. Now it is moving into Western Europe."

"Xiaomi's expansion has largely been in markets with open distribution and its approach often involves opening own brand shops. It is not used to focusing on operator relationships, and some of the European telcos have been leery of doing deals with Xiaomi," said Pinto. "Recently, however, it has announced a partnership with U.K.-based European operator 3, and we now expect it to pursue all channel opportunities as it ramps up its push into Western Europe."

IDC predicts that the smartphone market will approach 370 million smartphones in EMEA in 2018, a forecast volume which has been trimmed modestly against the previous forecast a quarter ago. However, the smartphone value forecast has increased, to $120 billion — a recovery to the highest level in the region, back in 2015.

"There will be many new models incorporating wider screens which will help boost the market," said Pinto. "The number of smartphones with bezel less screens will also rise, and we expect this to promote a replacement cycle."

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