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Thursday, February 22, 2018
Worldwide Sales of Smartphones Declined in 4Q, Samsung Retains First Spot


Global sales of smartphones to end users totaled nearly 408 million units in the fourth quarter of 2017, a 5.6 percent decline over the fourth quarter of 2016, according to Gartner, Inc.

This is the first year-on-year decline since Gartner started tracking the global smartphone market in 2004.

"Two main factors led to the fall in the fourth quarter of 2017," said Anshul Gupta, research director at Gartner. "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. Moreover, while demand for high quality, 4G connectivity and better camera features remained strong, high expectations and few incremental benefits during replacement weakened smartphone sales."

Acording to Gartner's data, Samsung saw a year-on-year unit decline of 3.6 percent in the fourth quarter of 2017, but this did not prevent it from defending its No. 1 global smartphone vendor position against Apple.

Worldwide Smartphone Sales to End Users by Vendor in 4Q17 (Thousands of Units)

Vendor

4Q17

Units

4Q17 Market Share (%)

4Q16

Units

4Q16 Market Share (%)

Samsung

74,026.6

18.2

76,782.6

17.8

Apple

73,175.2

17.9

77,038.9

17.8

Huawei

43,887.0

10.8

40,803.7

9.4

Xiaomi

28,187.8

6.9

15,751.3

3.6

OPPO

25,660.1

6.3

26,704.7

6.2

Others

162,908.8

39.9

195,059.1

45.1

Total

407,845.4

100.0

432,140.3

100.0

Source: Gartner (February 2018)

Despite the start of a slowdown in sales of Samsung's Galaxy S8 and S8+, the overall success of those models has helped Samsung improve overall average selling price. Samsung is poised to announce the successors to its Galaxy series of smartphones at Mobile World Congress (MWC) this year. The launches of its next flagship devices are likely to boost Samsung's smartphone sales in the first quarter of 2018. Although Samsung's significant sales volumes lean toward midprice 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.

While Apple's market share stabilized in the fourth quarter of 2017 compared to the same quarter in 2016, iPhone sales fell 5 percent. "Apple was in a different position this quarter than it was 12 months before," said Mr. Gupta. "It had three new smartphones - the iPhone 8, iPhone 8 Plus and iPhone X - yet its performance in the quarter was overshadowed by two factors. First, the later availability of the iPhone X led to slow upgrades to iPhone 8 and 8 Plus, as users waited to try the more-expensive model. Second, component shortages and manufacturing capacity constraints preceded a long delivery cycle for the iPhone X, which returned to normal by early December 2017. We expect good demand for the iPhone X to likely bring a delayed sales boost for Apple in the first quarter of 2018," added Mr. Gupta.

Huawei and Xiaomi were the only smartphone vendors to achieve year-on-year unit growth (7.6 and 79 percent, respectively) and grew market share in the quarter. With Huawei's new smartphone additions in the quarter, including Mate 10 Lite, Honor 6C Pro and Enjoy 7S, the vendor broadened the appeal of its smartphones.

Xiaomi's competitive smartphone portfolio, consisting of its Mi and Redmi models, helped accelerate its growth in the emerging Asia/Pacific (APAC) market. It also helped Xiaomi win back lost share in China.

In 2017 as a whole, smartphone sales to end users totaled over 1.5 billion units, an increase of 2.7 percent from 2016. Huawei, ranked No. 3, raised its share in 2017, continuing to gain on Apple. At the same time, the combined market share of the Chinese vendors in the top five increased by 4.2 percentage points, while the market share of top two, Samsung and Apple, remained unchanged.

Worldwide Smartphone Sales to End Users by Vendor in 2017 (Thousands of Units)

Vendor

2017

Units

2017 Market Share (%)

2016

Units

2016 Market Share (%)

Samsung

321,263.3

20.9

306,446.6

20.5

Apple

214,924.4

14.0

216,064.0

14.4

Huawei

150,534.3

9.8

132,824.9

8.9

OPPO

112,124.0

7.3

85,299.5

5.7

Vivo

99,684.8

6.5

72,408.6

4.8

Others

638,004.7

41.5

682,915.3

45.7

Total

1,536,535.5

100.0

1,495,959.0

100.0

Source: Gartner (February 2018)

In the smartphone operating system (OS) market, Google's Android extended its lead by capturing 86 percent of the total market in 2017. This is up 1.1 percentage points from a year ago.

Worldwide Smartphone Sales to End Users by Operating System in 2017 (Thousands of Units)

Operating System

2017

Units

2017 Market Share (%)

2016

Units

2016 Market Share (%)

Android

1,320,118.1

85.9

1,268,562.7

84.8

iOS

214,924.4

14.0

216,064.0

14.4

Other OS

1,493.0

0.1

11,332.2

0.8

Total

1,536,535.5

100.0

1,495,959.0

100.0

Source: Gartner (February 2018)


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