UK smartphones sales remained flat annually in Q3 2017, while the overall handset market (including feature phones) declined by 8% year on year.

Apple continued to lead the smartphone market with just over 34% share despite sales declining sequentially. Samsung was the second largest brand, slightly behind Apple, with flat market share YoY. The Chinese giant Huawei was the third largest brand, with consistent double-digit market share, leveraging a diverse portfolio across all price-tiers, but still some distance behind Samsung and Apple that represent something approaching a virtual duopoly. Like we see in the US market, Apple & Samsung together control more than two thirds of the UK smartphone market in sales volumes and more than 80% in sales value.

Exhibit 1: UK Smartphone Sales Ranking and Market Share – Q3 2017

Source: Counterpoint Research: Quarterly Market Pulse Q3 2017

The UK is one of the strongest markets for Apple globally and this is reflected in the premium segment’s share of the market overall. Despite Apple being at the tail-end of a product cycle through most of 3Q, the premium segment (>USD 500 wholesale) still grew both in terms of volume and value, while the overall market volume fell. Apple dominated the premium segment and was the main contributor to overall market value share - especially as the Average Selling Price (ASP) of the newly launched iPhone 8 was higher than the iPhone 7’s launch price. Samsung also enjoyed a strong position, accounting for almost one third of the premium market volume during the quarter. Apple and Samsung together leave very little room for other players.

The Apple iPhone 7 was the bestselling smartphone and contributed to 15% of the total smartphones sold in Q3 2017. Samsung’s Galaxy S8 and S8 Plus were second and third. Samsung also has a strong range across all price bands and it, together with Huawei, provided a strong volume platform that was resilient to attack from most other brands.

The UK operators and retailers have developed one of the best multi-channel distribution systems worldwide; few other countries offer quite the same level of sophistication. However, the limited range of brands offered in volume by the main operators means that market share is concentrated among just a few players. We don’t see this changing any time soon as distribution power is, if anything, being increasingly focused among the main operators.

Exhibit 2: UK Bestselling Smartphone Rankings – Q3 2017

Source: Counterpoint Research: Quarterly Market Pulse Q3 2017

Market Summary

• UK handset market declined 8% YOY in Q3 2017.
• Smartphone penetration reached 93% of all the mobile phones sold in the quarter.
• Top 5 brands account for almost 80% of the smartphone sales in Q3 2017.
• Apple continues to be the bestselling brand followed by Samsung. Chinese vendors Huawei, Alcatel and Motorola capture the next position in the UK smartphone market.
• In the premium segment Apple led the smartphone market followed by Samsung,