Home Technology 2Q18 Report: Smartphone market in third consecutive decline

2Q18 Report: Smartphone market in third consecutive decline


*Samsung unveils Galaxy Note 9 tomorrow
* Huawei upstages Apple

By Emmanuel Elebeke

Since the debut of Simon Personal Communi-cator in 1992 and the commercialisation of what is today known as smartphones in 1995, it is only in the second quarter of 2016 that manufacturers recorded the first decline in shipments across the world.

However, it followed same pattern in 2017 and now 2018, with declines happening in same second quarters. Perhaps, times are really changing and the global economy is taking a downturn, affecting markets adversely.


A preliminary data from the International Data Corporation, IDC’s Worldwide Quarterly Mobile Phone Tracker, has just revealed that smartphone vendors shipped a total of 342 million units during the second quarter of 2018, 2Q18, showing a 1.8 per cent decline when compared to the 348.2 million units shipped in the second quarter of 2017.

The drop marks the third consecutive quarter of year-over-year declines for the global smartphone market and only the fourth quarter of decline in history.

In the midst of the decline, interesting upsets happened. Smart device makers, Huawei upstaged Apple to become the number two global smartphone maker, while the global leader, Samsung, apparently feeling the heat of competition, plans to strengthen its position with the launch of Galaxy Note 9 high end smartphone tomorrow.

Despite declines in overall smartphone shipments, Huawei is said to have delivered shipments of 54.2 million units to move into the second position with a record market share of 15.8 per cent.

Samsung on its part maintained a comfortable lead in the quarter, although indications from its recent 2Q18 earnings suggest its mobile division revenues will face challenges moving forward.

IDC says the declines are as a result of mix in some highly penetrated markets, although many high growth markets still exist and should return smartphone shipments to overall growth.

Research manager, World Quarterly Mobile Phone Tracker, Anthony Scaesella, noted that: “The combination of market saturation, increased smartphone penetration rates, and climbing average selling prices, ASPs, dampened the growth of the overall market.

“Consumers remain willing to pay more for premium offerings in numerous markets and they now expect their device to outlast and outperform previous generations of that device which cost considerably less a few years ago.”

He advised that to contest this slowdown, moving forward, vendors should focus on latest innovative features and form factors combined with incentives and promotions to drive growth in many of these highly competitive markets.

Vice-President, Program, World Mobile Device Tracker, Ryan Reith, also added that: “the continued growth of Huawei is impressive, to say the least, as is its ability to move into markets where, until recently, the brand was largely unknown.

“It is worth noting that Apple moved into the top position each of the last two holiday quarters following its product refresh. So it’s likely we’ll see continued movement among the top ranked companies in 2018 and beyond.”

Meanwhile, data from the report indicates that Xiaomi, OPPO, and Vivo are all slowly pushing their customer base upstream at a price tier slightly lower than the top three.

Highlights of shipments

Samsung in the period under review once

again remained the leader in the worldwide smartphone market despite a 10.4 per cent decline in shipments from last year.

The flagship S9/S9+, which launched late in the first quarter, witnessed slower than normal sales according to Samsung.

Samsung claims the slowdown is due to both intensified competition at the high end and an overall sluggish smartphone market.

The Korean giant says it will look to bolster sales in the coming weeks with the arrival of the new Galaxy Note 9. The new Note will be unveiled tomorrow and is expected to launch earlier than the Note 8 to gain a foothold ahead of launches from Apple and others. The device is expected to feature a bigger battery, new S-Pen capabilities, and increased performance.

Huawei surpassed Apple for the first time to move into the second position based on global market share. It continues to lead the China smartphone market with a record-high market share of 27.0 per cent in 2Q18. In the first half of this quarter, Huawei’s P20/P20 Pro series found strong demand in the $600-$800 price segment, helping Huawei build a high profile in the market. In the second half, with the release of its “GPU Turbo” technology, Huawei continued to earn a good reputation.

Apple dropped to the third spot for the first time despite its second quarter growth. Apple shipped 41.3 million iPhones, representing modest growth of 0.7 per cent over the 41.0 million units shipped last year. The iPhone continued to perform well at the high end as the iPhone X remains a top seller in many markets. Apple will look to regain control of the market this fall with the expected launch of three next generations of iPhone models. The new models are rumoured to bring different screens sizes, price points, increased performance and new features to the table when they arrive next quarter.

Xiaomi has pulled ahead of Samsung for the number 1 position in India over the past few quarters and has now closed the gap with Samsung in Indonesia as it ramped up its local production to address the increased demand during Ramadan period, while also expanding its online channel presence and opening up more Mi home stores in the country.


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