Smartphone Shipments Decline 3% in Q3, Reaches 386.8 Million

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The top 10 smartphone players control 79 per cent of the market leaving more than 600 brands to compete for the rest 21 per cent of the market

Global shipments of smartphone dropped 3% year-on-year to 386.8 million units in third quarter of 2018. However, Chinese players Xiaomi, OPPO and Vivo have recorded their highest ever shipments in a single three-month period, according to the recent research by Counterpoint’s Market Monitor service.

The top 10 smartphone players control 79 per cent of the market leaving more than 600 brands to compete for the rest 21 per cent of the market, the firm said.

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South Korean major Samsung remains the leader of the smartphone market, having 19 per cent share in the given quarter. Even though Samsung witnessed the highest shipments of smartphone in India, its shipments dropped for the fourth straight quarter.

Chinese players ruling the market

Chinese companies continue their growth path, recording strong performances in the smartphone markets outside China. The shipments of Apple iPhone remained constant in the quarter year on year. However, the company’s revenues from the devices up by 29% with an average selling price of $793, the report said.

Commenting on the decline, Tarun Pathak, Associate Director at Counterpoint Research, said, “This is the first time that the global smartphone market has declined for three consecutive quarters. It can be attributed to a weakening demand in developed markets like China, the US and Western Europe which account for almost half of smartphone sales globally. The lack of meaningful innovation and improvement in smartphone build quality is leading to lengthening replacement cycles.”

“Despite the decline in its home market, Chinese brands OPPO, Vivo and Xiaomi reached new highs in smartphone shipments in a quarter. Huawei was also able to maintain its 50 million smartphone shipments and retain its second position in the third quarter of 2018. This suggests that the companies are reducing their dependence on their home country. The brands will further expand outside China as they push into Asia Pacific countries and Europe,” Pathak added.

Emerging markets present growth opportunities

Some emerging markets, such as India, witnessed a double-digit growth. However, it was not sufficient for compensating the decline in smartphones volume in developed markets, the report stated.

Though the emerging markets are still under-penetrated, these markets have a smaller base of smartphone users. On the other hand, this presents opportunities for long-term growth for original equipment manufacturers (OEMs) which are entering such markets to expand their sales, it added.

Shobhit Srivastava, Research Analyst at Counterpoint noted, “The growth in the emerging markets is led by Chinese smartphone players that are venturing out of China to capture sales. The offerings from these OEMs have intensified competition and many features and capabilities common among flagship models are now progressively diffusing through to the lower price bands. This is also affecting local smartphone players in the emerging economies, which are struggling to maintain a foothold.”

Smartphone OEMs are gradually increasing the average selling price of their devices by providing additional features such as artificial intelligence (AI), full-screen display, dual camera and high memory configurations. Due to this, they the brands are maintaining their revenues in spite of declining shipments, the report stated.

The next cycle of growth in developed markets will possibly be led by arrival of commercially available 5G network, which is still yet to be launched, it said.

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