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Tuesday, May 29, 2018
Smartphone Sales Returned to Growth in First Quarter, Samsung Maintains No.1 Position


Global sales of smartphones to end users returned to growth in the first quarter of 2018 with a 1.3 percent increase over the same period in 2017, according to Gartner, Inc.

Compared to the first quarter of 2017 sales of total mobile phones stalled and reached 455 million units in the first quarter of 2018.

Nearly 384 million smartphones were sold in the first quarter of 2018, representing 84 percent of total mobile phones sold, Gartner estimates.

"Demand for premium and high-end smartphones continued to suffer due to marginal incremental benefits during upgrade," said Anshul Gupta, research director at Gartner. "Demand for entry-level smartphones (sub-$100) and low midtier smartphones (sub-$150) improved due to better-quality models."

Continued weakness in Greater China's mobile phone market also limited growth potential for the top global brands, including Chinese brands such as OPPO and Vivo, with over 70 percent of their sales coming from Greater China.

Samsung's midtier smartphones faced continued competition from Chinese brands, which led to unit sales contraction year on year. This is despite the earlier launch of its flagship Galaxy S9/S9+ compared to the S8/S8+ in 2017, and despite the Note 8 having a positive impact on Samsung sales in the first quarter of 2018. Samsung's smartphone growth rate is expected to remain under pressure through 2018, with Chinese brand's growing dominance and expansion into Europe and Latin America markets. Samsung is challenged to raise the average selling price (ASP) of its smartphones, while facing increasing competition from Chinese brands that are taking more market share.

Worldwide Smartphone Sales to End Users by Vendor in 1Q18 (Thousands of Units)

Vendor

1Q18

Units

1Q18 Market Share (%)

1Q17

Units

1Q17 Market Share (%)

Samsung

78,564.8

20.5

78,776.2

20.8

Apple

54,058.9

14.1

51,992.5

13.7

Huawei

40,426.7

10.5

34,181.2

9.0

Xiaomi

28,498.2

7.4

12,707.3

3.4

OPPO

28,173.1

7.3

30,922.3

8.2

Others

153,782.1

40.1

169,921.1

44.9

Total

383,503.9

100.0

378,500.6

100.0

Source: Gartner (May 2018)

The delayed sales boost for Apple from last quarter materialized. Apple's smartphone unit sales returned to growth in the first quarter of 2018, with an increase of 4 percent year on year.

"Even though demand for Apple's iPhone X exceeded that of iPhone 8 and iPhone 8 Plus, the vendor struggled to drive significant smartphone replacements, which led to slower-than-expected growth in the first quarter of 2018," said Mr. Gupta. "With its exclusive focus on premium smartphones, Apple needs to significantly raise the overall experience of its next-generation iPhones to trigger replacements and lead to solid growth in the near future."

Huawei's refreshed smartphone portfolio helped strengthen its No. 3 global smartphone vendor position.

"Achieving 18.3 percent growth in the first quarter of 2018 helped Huawei close the gap with Apple," said Mr. Gupta. "However, its future growth increasingly depends on the vendor ramping up share in Emerging Asia/Pacific and resolving issues in the U.S. market, through the development of a stronger consumer brand. Huawei's attempt to grow its premium smartphone portfolio with its recent launches of the P20, P20 Pro and Honor 10 helps raise its competitiveness and growth potential."

Xiaomi was the clear winner of the first quarter, achieving a growth of 124 percent year on year. Xiaomi's refreshed portfolio of smartphones and aggressive pricing strategy helped it hold the No. 4 spot in the first quarter of 2018. "This strategy led Xiaomi to achieve 330 percent growth in the Emerging Asia/Pacific region," said Mr. Gupta.

In the smartphone operating system (OS) market, Google's Android and Apple's iOS achieved growth in units in the first quarter of 2018, but Android saw its share slightly contract.

Worldwide Smartphone Sales to End Users by Operating System in 1Q18 (Thousands of Units)

Operating System

1Q18

Units

1Q18 Market Share (%)

1Q17

Units

1Q17 Market Share (%)

Android

329,313.9

85.9

325,900.9

86.1

iOS

54,058.9

14.1

51,992.5

13.7

Other OS

131.1

0.0

607.3

0.2

Total

383,503.9

100.0

378,500.6

100.0



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