Smartphone market slowdown continues

02 NOV 2018

The global smartphone market experienced continued weakness in Q3, as the industry suffered from issues including frail consumer demand on the back of limited device innovation, analysts revealed.

Strategy Analytics pegged the market at 360 million units in Q3, down 8 per cent year-on-year: “The smartphone industry is struggling to come to terms with heavily diminished carrier subsidies, longer replacement rates, inventory buildup in several regions and a lack of exciting hardware design innovation,” Linda Sui, director, said.

IHS Markit sized the market at 354.8 million units, with a year-on-year decline of 3.3 per cent.

Vendor breakdown
While Samsung retained top spot, shipping 72.3 million units (Strategy Analytics) or 70.9 million (IHS Markit), both analyst companies agreed the vendor is suffering at the hands of Chinese rivals, particularly in the important markets of China and India. IHS Markit said competitive pricing from its rivals had seen Huawei and Samsung become the largest players in a number of markets.

Second-placed Huawei maintained the position it gained over Apple earlier this year, shipping 51.8 million units (Strategy Analytics) or 52 million (IHS Markit). Huawei grew its position in most markets, especially EMEA, but Strategy Analytics pointed out it has “little presence in the valuable North America market”.

Apple, one of the few vendors to actually report shipment numbers (although this will end shortly) shipped 46.9 million units. The company’s ASPs have grown strongly on the back of its new iPhone units, but the entry-level iPhone XR was made available later: IHS Markit predicts that as the new models become more widely available, “the company is likely to regain the second-ranked position from Huawei”.

Fourth-placed Xiaomi shipped 33 million units (Strategy Analytics) or 32.4 million units (IHS Markit) as its global expansion continued, although Strategy Analytics warned its performance “continues to slow, due to intensified competition from Huawei in its key markets of India and China”.

IHS Markit said the big four Chinese players (Huawei, Xiaomi, Oppo and Vivo) accounted for 41 per cent of global shipments. The strong performances of these companies is making it harder for small-scale manufacturers to compete: shipments by manufacturers ranked seventh and below (which includes well known brands such as LG Electronics, Motorola, Sony and HTC) are declining every year.

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