Slowdown in China leads to 2-3% decline in Q1 2018 global smartphone shipments

As per latest data from research firms, smartphone shipments from China have declined below 100 million units for the first time since Q3 2013 due to slow conversion of new smartphone users and slowdown in developed markets

 

According to International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, smartphone vendors shipped a total of 334.3 million units during the first quarter of 2018, resulting in a 2.9% decline thanks to China market where shipment volumes dipped below 100 million in the quarter, which hasn’t happened since the third quarter of 2013.

“Globally, as well as in China, a key bellwether, smartphone consumers are trading up to more premium devices, but there are no longer as many new smartphone converts, resulting in shipments dropping,” said Melissa Chau, associate research director with IDC’s Worldwide Mobile Device Trackers.

“When we look at it from a dollar value perspective, the smartphone market is still climbing and will continue to grow over the years to come as consumers are increasingly reliant on these devices for the bulk of their computing needs,” added Chau.

According to Strategy Analytics, the global smartphone shipments fell 2 per cent annually to reach 345 million units in Q1 2018.

Samsung recaptured first position with 23 per cent global smartphone marketshare, while Apple grew slightly to 15 percent share. Huawei and Xiaomi performed best among the major players and both hit record marketshare levels.

Samsung remained the leader in the worldwide smartphone market grabbing 23.4% share despite experiencing a 2.4% decline from Q1 2017. Apple’s first quarter saw the iPhone maker move 52.2 million iPhones representing a modest 2.8% year-over-year increase from the 50.8 million units shipped last year. Huawei climbed to a new market share high of 11.8% even as it remained in third overall. Huawei has toed the line between maintaining a strong domestic position while slowly upscaling its brand image in international markets

Global Smartphone Shipments in Q1 2018

Research Firm – Smartphone Shipments – Growth

IDC – 334.3 mn – (-2.9)%

Strategy Analytics – 345 mn (- 2%)

Counterpoint – 360 mn

Source: DigiAnalysys

Xiaomi’s strong performance has no doubt been due to its strong growth outside of China with 1Q18 the first quarter that less than half of its shipments were domestic, a transition that very few Chinese companies have reached.

According to the latest research from Counterpoint’s Market Monitor service, global smartphone shipments declined 3% annually in Q1 2018. The Top 10 players now capture 76% of the market thereby leaving 600+ brands to compete for the remaining 24% of the market.

Commenting on the declining smartphone growth, Tarun Pathak, Associate Director at Counterpoint Research said, “The waning smartphone demand is due to a slowdown in developed markets where replacement cycles are lengthening with overall smartphone features and design reaching its peak.”

Commenting on the regional performance of Chinese brands during the quarter Research Analyst, Shobhita Srivastava of Counterpoint Research said, “The saturating China smartphone market is forcing the Chinese smartphone players to invest and expand beyond their home market. The efforts have been realized as the performance of Chinese brands in MEA, Europe and the rest of the Asian markets has been strong. The ideal smartphone market for Chinese brands are the emerging smartphone markets such as Bangladesh, Myanmar and Middle East & Africa where LTE is being launched for the first time or the network is expanding to more covered geographies.”

Linda Sui, Director, Strategy Analytics said, “Global smartphone shipments fell 2 per cent annually from 353.8 million units in Q1 2017 to 345.4 million in Q1 2018. The global smartphone market has slowed down this year, due to longer replacement rates, diminishing carrier subsidies, and a lack of new hardware design innovation.”

Despite fears of expensive pricing, Apple iPhone X was the world’s best-selling smartphone model, shipping an impressive 16 million units during the quarter.

Top 6 Global Smartphone Shipments by Model – (Mn of Units)

Rank – Model – Shipments (in mn)

  1. Apple iPhone X – 16
  2. Apple iPhone 8 – 12.5
  3. Apple iPhone 8 Plus – 8.3
  4. Apple iPhone 7 – 5.6
  5. Xiaomi Redmi 5A – 5.4
  6. Samsung Galaxy S9 Plus – 5.3

Source: Strategy Analytics

Apple iPhone X shipped 16 million units and captured 5 percent market share worldwide in Q1 2018. For the second quarter running, the iPhone X remains the world’s most popular smartphone model overall, due to a blend of good design, sophisticated camera, extensive apps, and widespread retail presence for the device. Apple has now shifted almost 50 million iPhone X units worldwide since commercial launch in November 2017. The Apple iPhone 8 and iPhone 8 Plus shipped 12.5 and 8.3 million units, respectively, for second and third place. Apple iPhone 7 was at fourth place with 5.6 million units.

Xiaomi Redmi 5A shipped 5.4 million units for fifth place and 2 percent marketshare worldwide in Q1 2018. Xiaomi has become wildly popular across India and China. Xiaomi is selling a huge volume of smartphones through online channels, with key retail partners including Flipkart and JD.

As per Strategy Analytics estimate Samsung Galaxy S9 Plus shipped 5.3 million units for sixth place and 2 percent marketshare worldwide in Q1 2018. Strategy Analytics expect S9 Plus to become the best-selling Android smartphone globally in the second quarter of 2018.