Gartner: ‘Smartphone sales fell for the first time in 4Q’
In the last quarter of 2017, there was a 5.6% reduction over the last quarter of 2016 in terms of smartphone sales all over the world. It was equal to around 408 million smartphones units. Since Gartner started researching on the smartphone market worldwide in 2004, this is the first time year-on-year reduction was seen.
The research director at Gartner, Anshul Gupta claimed that there were two major factors which led to the fall of smartphone sales in the last quarter of 2017. The first one is the upgrades from featured phones to smartphone which slowed down because of the deficiency of quality smartphones at ultra-low-cost and users selecting quality feature phones instead of smartphones.
The second one is the replacement smartphone users selecting quality models to use them for a long time and increasing the time required for replacement of smartphones. In this quarter of 2017, people kept demanding high quality, better camera features and 4G connectivity, the smartphone sales remained weak during replacement period ude to higher expectations and fewer benefits.
Samsung had a 3.6% decline over smartphone sales in the last quarter of 2017, marking a year-on-year decline over the last quarter of 2016. It still stayed at the top of the smartphone vendor position worldwide, a step above its large competitor Apple.
The slowdown in sales started when Samsung launched its Galaxy S8 and S8+ smartphones. But, the overall success of these phone models improved the average selling price for Samsung in comparison to 2016. Samsung has announced that they would be announcing the next versions in the Galaxy smartphone series at Mobile World Congress (MWC).
Gartner has also claimed that the launches of the next flagship smartphones of Samsung are likely to grow their sales in the year 2018.
The sales volumes of Samsung mostly depend upon mid-price and entry-level phones, which are facing extreme competition with other brands and reducing contribution. But, if the next flagship smartphones of Samsung become successful, Samsung’s profit and average revenue may improve further.
Apple’s market share has stabilized in the last quarter of 2017 in comparison to the last quarter of 2016, but still the sales of iPhone have suffered a 5% decline.
Anshul Gupta also told that Apple was in a different position in this quarter of 2017 while comparing with their position in 2016. They had 3 new blockbuster smartphones – the iPhone 8, the iPhone 8 Plus and the iPhone X. But, due to few factors, the performance of Apple in this quarter of 2017 was still lower. Since users waited to try the expensive smartphone, the later availability of the iPhone X resulted in slower updates to the iPhone 8 and the iPhone 8+. Also, the constraints of component shortages and capacity of manufacturing preceded a large delivery period for their latest model, the iPhone X. Although this returned back to the standard condition by early December of 2017, Apple is expected to bring a delayed boost in their sales of iPhone X in 2018.
Xiaomi and Huawei were the only smartphone manufacturers who achieve a year-on-year unit growth in the last quarter of 2017 while comparing with the same quarter in 2016. They had a 7.9 and 7.6 unit growth respectivele and they also grew their market share in this quarter. Xiaomi’s competitive portfolio of smartphones consisting of the widely popular Mi and Redmi smartphone models, helped to accelerate its growth in the Asian smartphone market. This unit growth also helped them get back their lost share over smartphone market in China.
Huawei launched many new smartphones in this quarter like the Mate 10 Lite, Honor 6C Pro and Enjoy 7S, and widened the appeal of its smartphones.
Gupta also added that the future opportunities of growth for Huawei will depend upon its winning market share in the growing Asia/Pacific market and the United States.
The biggest smartphone market for Xiaomi outside China’s market is India, where it is likely to continue experiencing high growth. Xiaomi can also be labelled as a strong global brand if its sales in Indonesia and other markets goes on increasing the emerging Asia/Pacific region.
While talking about the year 2017 altogether, the smartphone sales to end users was equal to over 1.5 billion units. It is an increase of 2.7% in smartphone sales while comparing with the year 2016 as a whole.
Huawei ranked third in the year 2017 over smartphone sales. They also raised their share over smartphone market in 2017, which helped them continue to gain on Apple. At the same time, the market share of Samsung and Apple in the top positions remained constand, while the combined market share of the Chinese manufacturers in the top five experienced a 4.2% points of increment.
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