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Chinese brands drive smartphone market in Q3 while Apple flat Image courtesy of Kanate at FreeDigitalPhotos.net Featured

Chinese brands Huawei and Xiaomi are driving the growth of the global smartphone market at the expense of declining Samsung marketshare and flat sales for Apple which is facing a saturated premium smartphone market for its products.

The latest report from analyst firm Gartner reveals that in the third quarter of 2018, Huawei and Xiaomi, helped drive global smartphone sales, with overall, global sales of smartphones to end users growing 1.4% in the quarter to reach 389 million units.

Apple’s performance was flat in the third quarter, with just 0.7% growth.

“Apple’s iPhones are facing a saturated premium smartphone market, with slowing growth rates and increased competition in China,” said Anshul Gupta, research director at Gartner.

“Apple’s new flagship smartphones, announced in September, will be key to defining Apple’s overall iPhone unit sales in 2018. Initial channel checks suggest that the Xs Max is outselling the Xs model, and we also see the Xs Max as a critical addition for the Chinese market where Apple has been losing share.”

And while sales of smartphones are slowing down for most mobile phone manufacturers, Huawei saw demand for its smartphones grow by 43% in the third quarter of 2018, with the big Chinese telco now remaining as the No.1 smartphone brand in Greater China and in the top three among many European markets.

gartner table peter dec

“If we had taken both Huawei and Xiaomi out of the global smartphone vendors list, smartphone sales to end users would have declined by 5.2 percent,” Gupta said.

“Led by low-price smartphones, enhanced camera features and high-quality resolution displays, top Chinese mobile phone manufacturers boosted their sales across emerging markets in the third quarter of 2018.

“The gap between Samsung and Huawei continues to shrink, as Huawei expands aggressively by investing in branding and distribution in the emerging markets of the Middle East, Asia/Pacific and Africa.

“Huawei is, for example, aggressively positioning its affordable Honor series smartphones to drive the shift from feature phones to smartphones in those markets.”

Gartner reveals that in the third quarter of 2018, Samsung experienced its biggest decline since Git has been tracking smartphone sales globally.

Samsung’s smartphone sales declined 14% in the third quarter, with its Galaxy S9, S9+ and Note 9 struggling to revive demand in 2018, and its revamped mid-tier and entry-tier smartphones continuing to face huge competition from the top Chinese brands who grew market share in key markets, such as India - and their expansion into regions beyond Asia/Pacific continues to take away opportunities from Samsung.

Gartner says that with global smartphone sales decelerating significantly, the attention of mobile phone manufacturers is moving to new technologies like 5G and foldable form factor to differentiate the user experience on smartphones and generate new user value.

“While 2019 will mark an important year for more R&D and testing/trials of varying 5G technologies, it is unlikely that 5G will be seen in mobile devices in significant volumes before 2020,” said Roberta Cozza, research director at Gartner.

“We expect 5G mobile phone sales to total 65 million units in 2020.

“In addition, several vendors, such as Samsung, Huawei and LG, are expected to launch new foldable form factors in 2019.

“Beyond the initial interest these devices will be expensive and with usability trade-offs initially. It will take time for vendors to build a strong ecosystem of software, and to get developers on board to generate attractive and innovative user experiences around foldable smartphones.”

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

 

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