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Mexico has been a notorious laggard in mobile uptake when compared to Latin American neighbors. It is the only major market with less than 100% mobile connection penetration as reported by local telecom regulators. Still, smartphone adoption is growing fast.
How fast? The Competitive Intelligence Unit (CIU) estimates the number of smartphone users rose 41.4% in Q2 2015 when compared to the same period a year earlier. This robust increase in the base of users of the advanced mobile device brought their total up to 62.5 million, or 59.8% of all mobile connections in the country.
Penetration levels among top earners have been higher for a while, leaving further growth to low-income consumers. It is precisely this group—with limited disposable income and requiring inexpensive devices—who is boosting sales of smartphones made by “underdog” brands like Lanix, ZTE and Huawei. According to the CIU, the group of smartphone manufacturers with less than a 2% slice of the market in Mexico expanded their combined share from 3.4% in Q2 2014 to 9.2% in the same period this year.
Among smartphone owners of these underdog brands, 61% belonged to socioeconomic levels C (middle class) and lower and spent an average MXN1,257 ($94.49) purchasing the mobile device, according to the CIU.
Two other manufacturers that offer a wide range of entry-level devices in their lineups and with tag prices well within the range of low-income consumers, LG and Motorola, also saw respective market share increases of 3.4 and 2.3 percentage points to reach respective market shares of 14.7% and 11.4% in Q1 2015.
On the losing end were Samsung, Nokia/Windows Phones and BlackBerry, all of which saw their market share reduced by at least 3 percentage points. The stumble was particularly hard for BlackBerry—the market leader until Q3 2013—dropping from a 9.1% market share in Q2 2014 to merely 2.6% in the same period this year. BlackBerry had remained relevant thanks to an elongated lifecycle as consumers in Mexico as consumers passed them to family and friends. But as prices for both devices and mobile internet services dropped in the past two years, the Waterloo, Ontario-based manufacturer quickly lost ground among existing consumers upgrading and newcomers choosing more affordable devices from other manufacturers.
Considering that growth in the bases of smartphone users and overall mobile internet users in Mexico are now primarily driven by newcomers from the lower rungs of the socioeconomic ladder, it is unsurprising that second generation (2G) connections represented the majority of mobile accesses to the web in Q1 2015, according to the CIU. 3G connections took just over a third of the market while 4G LTE access grabbed a 7.3% slice during the same period.
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