The US Smartphone market remains one of the most important and largest in the world in both volume and value terms. 

The US is an extremely concentrated market with Apple and Samsung dominating almost 60% of volumes.

In fact according to our latest Smartphone Model Tracker report, the top-50 models accounted for 9 in 10 of all smartphones shipped in the US in Q2 2019.

After the global giants Apple and Samsung there is a dramatic drop off to LG (14%), and TCL Alcatel (8%) followed by Motorola, Google and Blue.

Only 7 brands manage to get above 1% share in the US according to our latest analysis. 

The challenges in the US are many including demanding product specifications, superb quality, deep and pervasive distribution, market visibility and perhaps most important operator endorsement.

Despite the unexpected gift of Huawei and ZTE both being excluded from the US market in 2018 and to date in 2019, the gap between Apple and Samsung and the chasing pack has not changed dramatically. TCL Alcatel has been the top beneficiary with significant share gains while Motorola has also been able to nudge up its share. LG has notably failed to take advantage of lessened competition.

We expect increased focus and participation in the US market from leading Chinese brands but the US-China trade wars and distrust of Chinese brands by governmental figures if not the population en masse represent significant head winds. 

We know from our most recent consumer insights report that device price is a huge barrier and also that the vast majority of US smartphone buyers are looking for better battery performance, more reliable devices and improved camera performance.

So beyond existing vendors who might US Smartphone buyers consider for their next device. Strategy Analytics asked 2500 US Smartphone owners exactly this question and found pockets of opportunity for a surprising range of brands. 

Perhaps most surprising is that the history, prestige and innovation of Sony continue to resonate with US smartphone buyers despite being absent from the market many, many years.

Clearly, the global brand power and appeal of Sony in entertainment and consumer electronics still generates positive sentiment.

HTC remains a well regarded brand especially among Android owners and slightly older Americans who have fond memories of the vendor from days long gone.

Similarly, the Blackberry brand has pockets of consumers who have positive views from the long history in the early smartphone market of the last decade. 8% of US smartphone buyers would consider Amazon for their next device. Why not given Amazon's broad product portfolio and top of mind name recall as well as positive brand associations. 

Two of the most interesting vendors to consider for 2019/2020 in the US are ZTE and Nokia.

ZTE once number 4 and gaining on LG for third spot before self inflicted injuries and ban in 2018 and reentered the US recently. Can ZTE regain momentum and re-earn operator trust or will it be limited to he niche unlocked market?   Its a tough task but not impossible. ZTE has a long and successful history but absence has seen the slots filled by TCL Alcatel, Motorola and others that are not yet public. 

Nokia (HMD) has reiterated its view that there is potential in the US market for more affordable devices as the leading vendors push above $800 to $1000 smartphones.

The reality is that less than 10% of buyers will spend that much and even then will extend their replacement cycle to 2+ years. In the overall market the replacement cycle has lengthened to 33 months as buyers simply do not see a need to replace especially with much higher priced devices delivering in their view marginal value added. 

We believe there is a need for more affordable 4G and 5G devices. 5G rollout is moving along at a good pace but most Americans will not be covered in 2019 or indeed 2020 and the benefits of 5G remain a mystery to most consumers.

Nevertheless in 2020, US operators will be pushing 5G devices and the majority of high and premium tier sold will be 5G by the end of 2020. The opportunity for Nokia and other vendors will be to help operators drive down the price and narrow or eliminate the price premium for 5G over 4G devices. 

For 2020, we expect significant competition to emerge for LG and Motorola in particular as it is targeted by both existing players (TCL Alcatel, Google, OnePlus) as well as re-emerging players like Nokia.   

Sony continues to make excellent product but it is increasingly out of touch with the global market evolution.

A new design approach is needed for Sony to survive in the handset market. So, despite positive consumer consideration, the challenges and costs of doing business in the US  may be too onerous.  The US, as the worlds third largest market,remains a tempting target for many vendors but it is hugely challenging.

Finding clusters of users of other brands who are likely to switch vendor will be key. Identifying segments of the operator base that are unserved or under-served by the top 4 brands is a critical starting point.

Designing value propositions that will resonate with these customers and help operators win the device replacement driven churn battle in the mid tier will determine success or failure.  

Strategy Analytics custom team can help vendors position for success in the US market.