Phone wars

A swag of new-model devices and a challenger from China are making the NZ phone market even more competitive than usual, reports

The already-heated battle for the New Zealand smartphone market is getting hotter yet, as three of the latest devices launch in the space of three weeks.

The market’s latest contender, Oppo, arrived in the country this month, debuting t hree of its smartphones at a low-key launch event.

The Chinese manufacturer has previously sold other electronic devices in New Zealand, but this is the first time it has tried selling phones here.

Huawei, one of the big sellers in New Zealand, is set to launch its P10 smartphone next week, and global giant Samsung unveiled its muchanticipated Galaxy S8 and S8 Plus range last night.

This year will also mark the 10th anniversary of the iPhone, and rumours are circulating about Apple’s plans for an anniversary edition of the device.

With some 1.8 million smartphones sold in New Zealand last year, the big names are vying for a slice of the market.

“Traditionally the New Zealand smartphone market has been a twohorse race, led by Samsung and Apple — especially in the high-end space,” says Chayse Gorton, a market analyst with research company IDC.

“Huawei has ramped up share when comparing 2016 with 2015, which was expected with the large amount of marketing dollars they have invested in the country. A lot of Huawei’s shipment growth has come from the low-end space.”

Last year, Samsung had the highest market share as measured by shipments to New Zealand, with 35 per cent of the market according to IDC data. Apple was close behind on 29 per cent, with Huawei making up 15 per cent.

Huawei has declared open season on Apple and Samsung, vowing to knock them off their market leaders’ perch within five years and targeting 25 per cent of the global market.

In the last quarter of 2016, Huawei accounted for 10.6 per cent of the 428.5 million smartphones shipped globally.

Huawei has also committed to investing in New Zealand, this week announcing plans to spend $400m in the country over the next five years.

The head of the company’s consumer business group, Roson Luo, says the investment is proof of its commitment to New Zealand.

“The New Zealand market definitely presents growth opportunities for Huawei,” Luo says.

“[We were] the fastest growing smartphone brand in 2016 and the third most favoured brand . . . we expect to see continued market share growth in the mid and high tier segments throughout 2017.”

Data from IDC shows that in the last quarter of last year, Huawei’s share of smartphone shipments to this country jumped to 21 per cent.

Newcomer Oppo also has ambitions to take on Apple and Samsung in New Zealand.

The company’s head of marketing in this country, Kuan Li, says the brand is now the world’s fourth largest mobile phone maker.

He says Oppo has already taken the top spot in China — its home country — and it is only a matter of time before this happens in New Zealand.

“From my point of view, our target isn’t Huawei — we’re both targeting Samsung and Apple really,” says Li.

“We want to offer consumers in New Zealand more options than just Apple and Samsung.”

Gorton says Oppo will need to build its brand awareness with Kiwi consumers, in order to succeed in this market.

“In New Zealand, they are relatively unknown, hence will need to

invest a lot of marketingk dollars if they wish to succeed.”

He says the brand appears to be targeting the mid-range sector of the market.

In recent times, says Gorton consumers have tended to opt for either flagship devices or low-end phones with a good price for the specifications they offer.

Oppo’s offering he says, might convince consumers to consider purchasing a mid-range phone instead.

New Zealand's two big

telecommunications companies have also staked a claim in the smartphone market, with their own- branded devices.

Research from IDC shows Vodafone had an 11 per cent share of smartphone shipments for the last quarter of 2016, with Spark taking 4 per cent.

A survey by Research New Zealand found that more than 70 per cent of New Zealanders owned a smartphone in 2015, up from 48 per cent in 2013.

The research showed 91 per cent of 18 to 35-year-olds had a smartphone in 2015. For the 35-54 age bracket it was 78 per cent, and 45 per cent in the over55 age group.

Although Samsung held onto its top spot in smartphone shipments last year, it was hard hit by the recall of its Note 7 phones, after problems with the devices overheating and catching fire.

The recall and the associated fallout meant the company took a US$5.3 billion ($7.53b) hit to its earnings. Its share of New Zealand shipments in the last quarter of 2016 fell to 26 per cent, with Apple taking the lead at 31 per cent for the quarter.

“I think the Note 7 recall influenced Samsung’s market share in 2016 Q4,” Gorton says. “Traditionally Samsung have high satisfaction, repurchase, and recommendation rates among consumers, hence if they can get the launch of the Samsung Galaxy S8 right, I expect them to win back share.”

Analysts globally have warned that the pressure is on Samsung to get its S8 series right, to win back public favour. The company has also faced corporate issues in its home, South Korea, with a senior company leader charged with bribery and embezzlement in a national corruption scandal.

In New Zealand, however, the company is focusing on moving forward. Asked about growing competition in the market, Samsung’s head of mobile in New Zealand, Todd Selwyn, says he isn’t too concerned.

“It’s not really a war,” says Selwyn. “The New Zealand market is 90 per cent Apple and Samsung and the others are sort of noise.

“In saying that, we do monitor the market and we always want to make sure we give the best value to consumers.”

More than 2 million Samsung devices are in use in New Zealand and the biggest challenge for the company is ensuring that users are happy with the product and remain Samsung customers. Selwyn says the latest S8 also fits with what New Zealand consumers are looking for.

“The market has been pushing into the larger screen devices and people are spending more on their phones every year,” Selwyn says. “So in the New Zealand market, volume and value is still growing and over 60 per cent of our market in New Zealand is over $1000 phones so most people are going for an expensive one.

“The S8 is firmly targeted in that space — metal and glass construction, the quality of material, the design and software interface etc. is very targeted at the premium end.”

Samsung is likely to face stiff competition when the iPhone anniversary device is launched this year, with IDC predicting sales will far outstrip the iPhone 7 series.

And with Oppo and Huawei both gearing up to challenge the big players, this is one race that shows no sign of reaching the finishing point.