Global smartphone shipments suffered the biggest annual decline in the history of the form factor during Q4 2017 due to a collapse in China, Strategy Analytics announced.

Shipments of 400 million units during the quarter were down 9 per cent year-on-year. The research company noted shipments in China, the world’s largest smartphone market, fell 16 per cent compared with Q4 2016.

Linda Sui, director at Strategy Analytics, explained the decline in China was “due to longer replacement rates, fewer operator subsidies and a general lack of wow models.”

However, on a full-year basis, global shipments grew 1 per cent and topped 1.5 billion units for the first time ever. Apple ranked in top place with a 19 per cent market share after shipping 77.3 million units, down 1 per cent from Q4 2016.

Strategy Analytics stated in a report: “Despite robust iPhone X demand and an iPhone average selling price approaching an incredible $800, we note global iPhone volumes have actually declined on an annual basis for five of the past eight quarters. If Apple wants to expand shipment volumes in the future, it will need to launch a new wave of cheaper iPhones and start to push down, not up, the pricing curve.”

Apple’s fiscal Q1 earnings showed the slip didn’t impact iPhone revenue, which grew 13 per cent year-on-year to $61.6 billion on the back of a $101 hike in average selling price between calendar Q4 2016 and the comparable 2017 quarter.

Samsung ended Q4 2017 breathing down Apple’s neck: the South Korea-headquartered vendor garnered a market share of 18.6 per cent on shipments of 74.4 million, down 4 per cent year-on-year. Strategy Analytics said Samsung is under pressure from Chinese rivals in China and India, “but remains the largest smartphone brand on a global basis, shipping an unmatched 317.5 million units in full-year 2017.”

China competition
Huawei ranked in third place globally with a 10 per cent market share. The research company said Huawei performed well across Asia and Europe, but is struggling to crack the US market due to limited distribution channels: a factor Strategy Analytics said could hinder “Huawei’s goal to be the world’s number one or two smartphone vendor.”

Although Oppo took fourth place overall, shipping 29.5 million units, this was flat compared with Q4 2016. Strategy Analytics noted Oppo had registered 99 per cent year-on-year growth in Q4 2016 and said the lack of growth in the recent quarter means the “golden age for Oppo is coming to an end”.

Competition from China-based rival Xiaomi was cited as a factor in Oppo’s decline. The research company said Xiaomi clocked up 87 per cent annual growth with shipments of 27.8 million in Q4 2017. Its market share increased from 3 per cent to 7 per cent.

Xiaomi’s range of Android models, such as the Redmi Note 4, is proving “wildly popular” in India. However, the company expects Xiaomi’s growth to slow in 2018 as rivals including Huawei “fight back with improved or cheaper new designs.”