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Smartphone market breaks losing streak

After five consecutive quarters of declines, the global smartphone business has recorded marginal growth in the third quarter.

Worldwide smartphone shipments totalled 360 million units in the third quarter of 2019, up 1.2 percent from 355.8 million during the same time period in 2018, according to the Smartphone Intelligence Service report from IHS. This marks the first year-over-year increase since the first quarter of 2018.

According to the report, while Samsung retained the top spot, it was Huawei – despite all its problems – which has been driving the market with shipments jumping by 14.8 million units to reach 66.8 million. Shipments rose by 28 percent compared to one year earlier.

According to analyst Jusy Hong, that growth was driven by the domestic Chinese market, which more than compensated for a drop in overseas sales, due to US sanctions.

Huawei’s overseas shipments fell on a year-over-year basis in the third quarter. However, these shipments expanded compared to the second quarter.

While the company is engaging in promotional activities designed to mitigate shipment declines in regions like Western Europe, sanctions could begin to take a toll in the future.

Huawei is prohibited from including Google Mobile Services on new smartphones and that could cause real difficulties in some markets.

Samsung Electronics retained the No. 1 spot globally by shipping 78.0 million units in the third quarter. This is a 10 percent increase over the same period last year. The company’s market share also increased by 2 percentage points to 22 percent.

Samsung has been strengthening its mid-range and low-end smartphone line-up to compete with the budget phones from Chinese brands.

While Apple shipped a total of 45.9 million iPhones during the third quarter this represents a 2.1 percent decrease from the same period in 2018 and continues Apple’s unit decline for a fourth consecutive quarter. Despite that the company’s market share rose to 13 percent, up from 11 percent in the previous quarter.

Second-tier brands Xiaomi, OPPO and vivo have seen their growth stunted due to Huawei's market share expansion in China, combined with difficulties in developing sales in overseas markets. Xiaomi’s shipments declined by 6 percent and Vivo declined 3 percent. OPPO, on the other hand, grew by 2 percent.

Whether this growth continues over the coming months remains open to question, with doubts around the US and China coming to a trade agreement and the growing threat of recession in key markets around the globe all casting a shadow over the future direction of the market.

Author
Neil Tyler

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