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TECNO’s premium push and global growth propel transsion to record quarter

Transsion Holdings, the emerging markets focused mobile devices company, saw Q3 2023 revenues advance 39% YoY to reach RMB 17.99 billion. Net profit for the quarter grew 190% to RMB 1.34 billion. It was the best quarter ever in the company’s history in both financial metrics. Gross profit margins reached 25.2%, from 19.4% from a year ago, due to continued improvement in product mix, driven by higher priced smartphones, and market share expansion in newly entered higher-value markets.

TECNO Q3 2023 Shipments

According to Counterpoint’s Market Monitor service, TECNO, the biggest brand in Transsion’s family, saw smartphone shipments grow across all regions in Q3 2023, by an impressive 62% YoY. This underpinned Transsion’s results, which saw smartphone shipments for the quarter increase 36% YoY.

TECNO Q3 2023 Markets Share

With 4% of the global smartphone market in Q3 2023, TECNO is now the world’s 9th largest smartphone brand. TECNO’s growth is particularly impressive considering market share has more than trebled in just three years. This also helped parent company Transsion becoming one of the world’s top 5 smartphone OEMs.

TECNO Fastest Growing Brand in Q3 2023

Commenting on the performance of Transsion brands, Senior Analyst Yang Wang said, “Without a doubt improving macroeconomic conditions in emerging markets, such as stabilized exchange rates, lower inflation and better economic growth forecasts helped smartphone companies, however, Transsion brands stood to benefit the most due to their channel presence in key markets and attractive product offerings, particularly to price-sensitive consumers that have been hit hard in the past year.”

Commenting on TECNO’s rapidly increasing market presence, Wang further added, “TECNO has been the most visible brand in Transsion’s portfolio. TECNO’s two foldable device launches, at MWC in Barcelona earlier in the year and in Singapore in September, boosted the brand’s global image and showcased its ambitions. In its quest for growth beyond the African home market, TECNO was able to differentiate itself by offering devices that have excellent specifications, including unique designs, good display and batteries, as well as all-round camera capabilities with impressive photo and video quality – especially considering the price positioning.”

While TECNO’s shipments have increased, product mix improvement meant that the proportion of higher-value devices sold has expanded even more. According to Counterpoint’s Global Handset Model Sales service, almost all TECNO smartphones are now equipped with 4G or 5G connectivity. 5G smartphones, which TECNO started shipping only since Q1 2022, have grown rapidly, with volume increasing more than 600% YoY by Q3 2023. Furthermore, sales volume of TECNO’s high end CAMON series and premium end PHANTOM series increased 53% YoY, outpacing company-wide growth rates. The PHANTOM series now accounts for almost 5% of TECNO’s global sales, which is up from only 0.3% a year ago. This will be particularly encouraging for TECNO as it is a sign that its effort to compete in the mainstream of global smartphone industry is bearing fruit, and TECNO is becoming accepted by consumers outside of Africa as a persuasive brand.

Foldable smartphones represent TECNO’s most ambitious attempt so far to secure a spot among leading global brands’ flagship lineup. After first entering the race by launching the PHANTOM V Fold at MWC in February 2023, TECNO is now the 9th brand globally for cumulative foldable smartphone sales. Among book type foldable smartphones, the PHANTOM V Fold stood out as the most affordable option, with Q3 2023 sales coming in second among devices priced below $1,000. What stood out from the device was a solid display, lack of crease in the inner screen, good battery life and all-around performance. These are the traditional strengths of TECNO devices in lower-priced segments. The fact that the brand has been able to carry these over to a competitively-priced flagship offering, at the first attempt, should give the market confidence that future flagship devices, such as the recently launched PHANTOM V Flip, will bear the same DNA and deliver equally good market reception.

With the global smartphone industry on the verge of a rebound after almost two years of decline, and with improving consumer sentiment and economic fundamentals, particularly in emerging markets, TECNO and Transsion can expect to continue their impressive performance heading into the crucial holiday shopping season. With a focus on offering competitive products at a reasonable price, TECNO can expect to ride the tailwinds from an improving macro-economic outlook and extend its positive momentum both in its African home market and the newly entered markets in the Middle East, India, Southeast Asia and Latin America. In the long term the growth trajectory is favorable, considering megatrends like urbanization, fast-developing connectivity infrastructure, feature phone to smartphone migration, cheaper components, and the spread of digital services, all of which are likely to gather pace. Counterpoint Research

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