New Zealand’s smartphone market: Apple, Samsung, Vodafone, Huawei – who got thumped in the first quarter?

Shortage, shmortage. Like New Zealand’s auto industry, which had record sales in May, the smartphone market has rebounded – and then some.

In the first quarter of last year smartphone sales dived as lockdowns hit, closing stores and more punters diverted funds to upgrading laptops and monitors as the workforce scattered to home offices.

But the smartphone market has rebounded sharply to record its highest quarter of annual growth since 2013 in the first quarter of this year.

According to the latest IDC Asia/Pacific Quarterly Mobile Phone Tracker, New Zealand smartphone shipments increased 30.1 year-on-year in the first quarter of 2021 to reach 319,000 units.

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This compares to 245,000 units during the first three months of 2020 as the pandemic began to restrict the supply of shipments to NZ.

And it represents a 4 per cent bump on the 305,000 units moved in the first quarter of 2019 during the “old-normal”.

IDC analyst Maxim Wilson pins the growth in part from the new era of hybrid working increasing our reliance on smartphones, and partly on Vodafone and Spark’s 5G rollouts.

Some 46 per cent of total smartphone shipments are 5G-capable – or four times as many phones as last year as the faster, smarter mobile technology filtered down to mid-price models.

Wilson sees stronger 5G growth in the months ahead. Partly because the telcos will be expanding their 5G networks, and partly because Vodafone and Spark have, to a degree, been concentrating their firepower on fixed-wireless so far (a technology for using mobile networks to deliver broadband to a home or office as a landline substitute).

“However, with several 5G devices launching in the market and greater expansion of 5G coverage, we expect to see stronger adoption for 5G smartphones in the coming quarters.’

Huawei sales collapse

The quarter also saw smartphone market leaders Apple and Samsung gain a larger share of the bigger pie as Huawei’s handset sales collapsed.

The Chinese giant has been hit by US sanctions that mean it no longer has full access to Google’s Android software or App Store, diminishing the appeal of its phones. That development, plus a GCSB ban on its network infrastructure gear, has seen Huawei NZ refocus on corporate videoconferencing gear and home solar installations.

The gap has been filled by Apple and Samsung, which collectively accounted for a stunning 84 per cent of the smartphone market in the first quarter, a record combined share in New Zealand, Wilson says.

Chinese brand Oppo also increased sales, with house-brand Androids from Vodafone and an “other” slither accounting for the balance of the market.

Chip shortage hits some, not others

Pandemic disruption has hit some brands more than others – and some barely, namely Apple, barely at all.

The chip shortage had meant longer wait times on some Android models, Wilson said.

But: “Apple is in a strong position due to its global presence and supply chain influence. Manufacturers are likely to prioritise it, due to its higher selling points.”

Beyond Samsung, which has had the market muscle to secure supply, “there is more pressure on Android vendors at the moment,” Wilson said.

Top-shelf taste

Another feature of the first-quarter was Kiwis shelling out for top-shelf models.

“Premium models, the iPhone 12 and Galaxy S21 – released in January 2021- exceeded expectations, as Kiwi consumers flocked in numbers to buy the new flagship devices,” Wilson said.

“Kiwis continued to allocate their discretionary spend to smartphones, in particular, flagship models. This increased buying saw year-on-year revenue growth of 34 per cent in the first-quarter as the ‘ultra-premium segment’ accounted for 30 per cent of shipments.”

IDC defines ‘ultra-premium’ as a phones that costs US$1000 ($1375) or more.

In the cheap seats

“The record combined market share from Apple and Samsung shows the gap Huawei has left in the market, as the Chinese vendor pivots away from smartphones,” Wilson says.

“This has presented an opportunity for other competitors, particularly in the Android space.

“Motorola has introduced more competitive smartphone offerings in the lower-end segment, as it seeks to compete with Samsung and OPPO, while Vodafone has been gaining share in the sub-NZ$150 price band.”

Xiaomi, the third-largest smartphone vendor globally, had a minute share in the Australia and New Zealand market. Its success in Europe, however, highlighted untapped potential in the region, Wilson said.

IDC anticipates 5G-capable share to pass 50 per cent in the June quarter as Android vendors launch devices in the mid-range price bands.

“The average selling price for 5G-capable devices was $1550 in the first quarter. IDC expects this to drop by at least 20 per cent in the second quarter,” Wilson said.


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