Global sales of smartphones to end users continued to decline in Q3 2019, contracting 0.4% compared with Q3 2018, according to research firm Gartner.
For the majority of smartphone users, desire has shifted away from owning the least expensive smartphone, opting instead for mid-tier smartphones over premium-tier ones. “This is because they offer better value for money, Gartner senior research director, Anshul Gupta said. “In addition, while waiting for 5G network coverage to increase to more countries, smartphone users are delaying their purchase decisions until 2020.”
This shift has led brands such as Samsung, Huawei, Xiaomi, OPPO and Vivo to strengthen their entry-level and mid-tier portfolios. This strategy helped Huawei, Samsung and OPPO grow in Q3 2019. By contrast, Apple recorded another double-digit decline in sales, year over year.
Huawei was the only one of the top-five global smartphone vendors to achieve double-digit growth in smartphone sales in Q3 2019 selling 65.8 million smartphones, an increase of 26% year over year. Huawei’s performance in China was the key driver of its global smartphone sales growth. It sold 40.5 million smartphones in China and increased its share of the country’s market by almost 15 percentage points.
While the ban on Huawei to access key US technologies is yet to be fully implemented as a three-month extension was just announced, the proposed ban brought negativity around Huawei’ brand in the international market. Nevertheless, Huawei’s strong ecosystem in China continued to show growth. The current situation with the US has also fostered patriotism among Huawei’s partners, which are now keener to promote its smartphones in China, a development that makes it difficult for local competitors to compete aggressively against Huawei.
Samsung maintained the number one position globally in Q3 by increasing its smartphone sales by 7.8%, year over year. “Samsung’s aggressive revamp of its portfolio, with a focus on mid-tier and entry-tier segments, strengthened its competitive position,” Gupta said.
Apple’s iPhone sales continued to fall, with sales of 40.8 million iPhones, a year-over-year decline of 10.7%. “Although Apple continued its sales promotions and discounts in various markets, this was not enough to stimulate demand globally,” according to Gupta. “In the Greater China market sales of iPhones continued to improve, however, it follows a double-digit decline recorded at the beginning of the year. The iPhone 11, 11 Pro and 11 Pro Max saw good initial adoption, which suggests that sales may be positive in the remaining quarter.”
Black Friday and Cyber Monday smartphone deals were also likely to spur consumer demand in Q4 with vendors, including Google and Samsung, offering aggressive price promotions. Not just for their older smartphones but also for new devices such as the Google Pixel 4 and Samsung Galaxy Note 10.
Competition between mobile phone manufacturers will increasingly focus on more intelligent smartphones, that will deliver increasingly personalised content and services that draw on users’ contexts and preferences.
“To deliver relevant personalised experiences, manufacturers will need to improve the integration of artificial intelligence (AI) in smartphones and make security capabilities and privacy key aspects of their brands,” Gartner senior research director, Roberta Cozza said. ““At a time of limited technology-led innovation, product managers should focus on offering attractive features at low prices as quickly as possible. By offering better value for money, they can increase demand for smartphones.”