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Mexico Smartphone Competition Ramps up with vivo seeking share of 25M unit market

by David Kerr | Jul 15, 2021

The already competitive Mexican smartphone market today saw a fresh injection of energy with the entry of Vivo. Vivo is already active in 10 European markets and has recently ramped up activities in Columbia, Peru, Chile in addition to strong presence in Asia Pacific. 

vivo's launch in Mexico was the usual mix of glitz, glamor and geeky tech specifications but was a well executed polished event.

The launch featured the V21 as well as Y20 and Y11s smartphones under the mantra "vivo el momento" partnered #mesientovivo for Instagram.

Exhibit 1: vivo Mexico launch screen shots.



Mexico is the biggest market to date which vivo has targeted in the region.  The grand but challenging prize of Brazil remains untapped

Exhibit 2: Handset Shipment Share 2018-2020 Select CALA Markets

Check out our quarterly vendor share tracking for 60 countries in Q1 2021 here. 

The Mexican handset/smartphone market has seen dramatic changes over the last few years. Shipments peaked back in 2015 above 38M units before dropping off to the 29m level in 2018/2019.

Like most markets around the world, Mexico suffered due to the horrendous Covid-19 spread and subsequent lockdowns in 2020. Our Smartphone Strategies service forecasts the market is on track for 24-25M units shipped in 2021.

Mexico is predominantly a replacement market with over 95% of device sales going to already experienced existing customers. 

Existing handset owners who are on their 3rd, 4th, 5th device (or more) are  familiar with the features and capabilities offered by multiple oems and realize there is little significant technology differentiation or for a huge portion of the market are largely indifferent to most technology claims. 

Mexican buyers like all consumers have established preferences and attitudes towards existing brands both from their smartphone offers and their broader experience with TV, computer, audio/video and household appliance products. Brands with 20-30+ years history in the market of course have an advantage. But as we have seen in both 4G and now in 5G many consumers have modest to no brand loyalty and will switch to get a better deal on devices from whatever operator or channel offers the most appealing bundle.

In terms of market dynamics in this predominantly replacement market there are two major disruptors
1. Geopolitics and the ban by the US government on Huawei purchasing technology from US companies (Qualcomm and Google most notably). This politically inspired ban has lead to the demise and inevitable retreat of Huawei both globally and in the Mexico market. At its peak in Q1 2019, Huawei captured over 21% share of shipments and was within a whisker of catching top placed vendor Samsung.

2. LG decision to exit the smartphone business entirely after many years of struggling to gain scale and profitability despite excellent innovation. At its peak LG was a strong second place in Mexico with a near 15% share before falling back  to very low single digits in 2020.  

Exhibit 3: Mexico Handset Vendor Share Q1 2021 and Q1 2019

vivo has ambitious plans for Mexico with a 10% share target noted as a goal but that will take time given their late start. 

Traditional leaders Samsung and Motorola as well as newer challengers like Xiaomi will be strong competitors. Xiaomi has vacuumed up significant portions of the Huawei and LG volume since its entry. Xiaomi had a huge Q1 2021 in volume terms  and is neck and neck with Apple for third place in Mexico.

Who will be most impacted as #vivosmartphone enters, #lgelectronics disappears and #Oppo #xiaomi build presence?

Vivo's product portfolio and marketing mix needs to be tailored to the unique demands, price tier distribution and buyer behavior of the Mexican market.

#share #smartphones #android #competition #consumerinsights 

- What % of handsets/smartphones sold are under USD $200? $200-399? $400+
-  Which brands have the largest market share in each price tier?
- What purchase channels are growing/declining overall? By vendor?
- What is the brand awareness, consideration and willingness to purchase for existing and new OEMS?
- What are the brand image and characteristics of top competitors in the local market?
- What are the replacement intentions and likelihood of repeat purchase?
- Which segments of the market offer the best opportunities (Brand Lovers, Technos, Aspiring Status, Value maximizers, Budget Utility?
- How will the nascent 5G market and broad line up of devices across price tiers change the competitive dynamics?

We anticipate a bruising battle in Mexico in the coming 6-8 quarters and stand ready to support client decisions and planning to understand and maximize opportunities in the changing landscape.

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