Smartphones Sales Log Ever First YOY Decline in Q4
Smartphone sales logged their first decline in over a decade during the fourth quarter, due to a slowdown in upgrades to more feature-rich phones and a lengthening of the life of existing mobile devices. According to market research firm Gartner, global sales of smartphones came in at close to 408 million in the fourth quarter of 2017, marking a 5.6% decline compared to the fourth quarter of 2016.
Gartner said it represents the first year-over-year (YOY) decline in smartphone sales since it began tracking it back in 2004. Among the top five vendors, which includes Samsung Electronics (SSNLF), Apple Inc., Huawei, Xiaomi and Oppo, only Huawei and Xiaomi saw sales and market share gains in the fourth quarter. (See also: Global Smartphone Shipments Suffered Biggest Ever Fall Last Quarter.)
"Two main factors led to the fall in the fourth quarter of 2017," said Anshul Gupta, research director at Gartner in a press release highlighting the quarterly numbers. "First, upgrades from feature phones to smartphones have slowed down due to a lack of quality "ultra-low-cost" smartphones and users preferring to buy quality feature phones. Second, replacement smartphone users are choosing quality models and keeping them longer, lengthening the replacement cycle of smartphones.” The analyst noted that demand for high-end phones with 4G and enhanced cameras is still in demand but that higher expectations left consumers with less reasons to replace their existing mobile phones.
During the last three months of the year, Samsung maintained its leadership position although sales were down 3.6% compared to the last three months of 2016. According to Gartner, successes with its Galaxy S8 and S8+ helped the company improve its overall average selling price in the face of a slowdown in sales of the two devices. Gartner predicted the launch of two new devices, which are expected this year, should boost Samsung's smartphone sales during 2018. “Although Samsung's significant sales volumes lean toward mid-price and entry-level models, which now face extreme competition and reducing contribution, its profit and average selling price may further improve if these next flagship smartphones are successful,” wrote Gartner. (See also: Apple Options Traders Bet Big on 15% Share Gain.)
Meanwhile, Apple also saw declines in shipments in the fourth quarter with sales falling 5% YOY, according to Gartner. It came in second place in terms of market share, which has stabilized. The research firm said demand for its newest phones was hurt by the later availability of the iPhone X which resulted in fewer upgrades to the iPhone 8 and the iPhone 8 Plus and component supply constraints that prompted a long delivery time for the iPhone X in the early days of its launch. “We expect good demand for the iPhone X to likely bring a delayed sales boost for Apple in the first quarter of 2018," said Gupta.
As for Huawei and Xiaomi, Gartner said they were the big winners for Q4, given they were the only ones to see sales and market share growth. Launches of new smartphones that were competitive with high-end ones were enough to drive demand to the Chinese smartphone markers. Huawei ended 2017 in third place and is gaining on Apple from a market share perspective. Xiaomi was in fourth place and Oppo, also of China, in fifth.
MTCHT
ICT
TECHNOLOGICAL INNOVATIONS
POST
ABOUT US
NEWS
INTERESTING
INTERVIEW
ANALYSIS
ONLAIN LESSONS
