Most smartphone brands are worthless

New research from IHS Markit reveals that, beyond Apple and Samsung, people aren’t loyal to smartphone brands.

This conclusion is based on a multinational survey (US, Brazil, UK, Germany, Japan, and India) conducted last year, in which IHS asked punters how they go about picking a mobile. The most common reason was the hardware, which is reassuring, and on the whole it found that people were less brand loyal ask they earned less money.

A big reason for that last trend will surely be the fact that the brand that attracts the most loyalty is also the most expensive – Apple. The only other brand that HIS found people expressed a large degree of loyalty towards was Samsung. It’s presumably no coincidence that these two companies spend far more money on marketing than any of the others.

Apple and Samsung combined claimed a customer loyalty rate of 69%, while all the rest could only manage 33%. When two thirds of your customer base are disloyal, it’s fair to say your brand is essentially worthless in that context, especially since a lot of brand loyalty can simply be attributed to inertia.

“Apple and Samsung have worked diligently over many years to build their brands, spending heavily on marketing and advertising to maintain a strong following among consumers,” said James Allison, Analyst at IHS. “As a result, these two companies have been able to erect competitive bulwarks that insulate them from the pressures faced by other brands. For companies not named Apple or Samsung, conditions in the smartphone business are intensely competitive, as companies battle over a few percentage points of market share without the benefit of a leading brand name.”

IHS didn’t give specific brand loyalty numbers for Apple and Samsung but it seems safe to assume Apple’s is higher. How much of this is down to brand alone, however, is debatable, since IHS seems to consider upgrading from a phone of the same brand to be evidence of brand loyalty. Since Apple uses a different OS and content ecosystem from all other smartphone makers, for many of its customers moving away from it is just too much hassle, so their ‘loyalty’ is more a matter of pragmatism than sentiment.

Samsung had three quarters of 5G shipments in Q3 – IHS

While the 5G smartphone market is in its infancy, Samsung has been the most proactive vendor and accounted for a quarter of shipments in Q3 as a consequence.

Research firm HIS Markit reckons a total of 4.3 million 5G smartphones were shipped in the third quarter of this year and 3.2 million of those were Samsung ones. This was more than double Samsung’s Q2 total of 1.5 million units, when it accounted for 83% of all shipments. Surprisingly the only other s% smartphone vendors of significance right now are LG and Vivo.

“Samsung has come out of the gate running in the initial stage of the 5G smartphone business,” said Gerrit Schneemann of IHS Markit Technology.  “The company successfully capitalized on its home-field advantage in the fast-developing South Korean market to rapidly ramp up shipments. Samsung also has moved quickly to fill out its 5G smartphone line, giving it the largest portfolio of any brand.

“5G devices enable smartphone OEMs, carriers and service providers to offer new handsets with a feature set that is not backwards compatible as existing 4G devices will not be able to connect to 5G networks. Here lies an opportunity for the entire ecosystem to reverse user behaviour, from increasing device lifecycles to delivering an upgraded mobile experience.”

The slow start from Huawei observed by HIS is at odds with the Strategy Analytics view of the 5G smartphone market. In its recent forecast SA gave Huawei a 30% share of the market going into 2020, for the two firms’ numbers to align Huawei is going to have to seriously raise its game in Q4 of this year.