Europe is the fastest growing region in the global smartphone market in Q3 2019, Canalys reports-- shipments are up by 8% Y-o-Y to 52.5 million units, making it the best performing Q3 "in history."
Driving such results is Samsung with shipments reaching a record 18.7m units, a 26% Y-o-Y increase. Also seeing strong shipments are Chinese vendors, namely Huawei and Xiaomi. The two companies are giving top priority to Europe for global expansion, especially amid US-China trade tension. Huawei retains 2nd place with 11.6m units, a strong bounce-back from the 8.5m units of Q2 2019 if a flat result from Q3 2018. Meanwhile 4th placing Xiaomi sees 73.% Y-o-Y growth through aggressive market expansion and a strong product portfolio.
Canalys describes Europe as being in a favourable position to attract many Chinese vendors, thanks to the current channel balance. Operators and open channels from 47% and 50% respectively in terms of the go-to-market, giving the potential to scale and healthier margins with mid to high-end products. Furthermore, the Chinese vendors can take on a weakening Huawei, even if the company is still not giving up the fight. That said, expect the likes of Oppo, Oneplus, Realme and Vivo to invest further in both brand awareness and local sales force, leading to a "very buoyant" smartphone market come 2020.
However Europe also represents threat as well as opportunity-- Brexit already had an impact in the UK, with distributors stockpiling products and hedging against impending tariff risk. Such a short-term artificial boost distorts the market, and the accompanying risk, costs and uncertainty are a drain on the industry. Yet 5G network rollout still makes a great opportunity, and a fragmented European landscape provides a broader range of potential partners for vendors, allowing relatively new brands like Xiaomi and Oppo to find footholds in the continent. In the meantime, as the 5G battle shifts to the mid-range in 2020, expect operators to make bold ranging decisions.