The global shipment of smartphones fell 5 per cent in first quarter of calendar year 2019, compared with the same period a year ago, making it the sixth consecutive quarter of decline. Only Chinese brands Huawei, OPPO and vivo were able to register a growth during the reporting quarter.
In the coming quarters, smartphone decline is expected to soften with the improving of Chinese economy, according to a report by Counterpoint Research.
“The global smartphone market showed no sign of recovery in Q1 2019. The rate of decline came down, particularly in February, due to inventory correction by some brands and the production halt during Chinese New Year. Another reason for the decline is lengthening replacement cycles, especially in the premium segment,” Tarun Pathak, Associate Director at Counterpoint Research said.
“The replacement rate for iPhones is reaching close to 36 months, while the replacement rate for premium Android devices is closing in at 30 months. This can be attributed to the higher quality of devices, increasing average selling price (ASP), and the lack of innovative technology,” he added.
Samsung recorded an increase in revenue as Galaxy S10 flagship smartphones did better than Galaxy S9 at the time of launch. The brand is going through restructuring of its smartphone line-up by launching new M series and A series smartphone.
Apple iPhone shipments declined year-over-year for the second consecutive quarter. It is increasingly difficult for Apple to grow ASP’s and China remains a declining market for the company. Apple's services, user experience, and companion products make up for its slow adoption of the newest technologies.
The growth potential for premium products may be difficult in upcoming quarters. iPhone XR was the best-selling iPhone during the quarter.
Xiaomi smartphone shipments declined annually as it faces competition in the home market. The brand continues to do well in India and entering new markets to offset the decline in the home market.
BBK Group (which owns OPPO, Realme, vivo and OnePlus brands) is collectively the world’s third largest manufacturer. All its brands registered growth during the quarter.
During the reporting period, Huawei’s share in the global smartphone market reached its highest level of 17 per cent, overtaking Apple as the second-largest selling smartphone brand. The handset-maker’s volumes rose by nearly 50 per cent year-on-year (YoY).
“Huawei became the second largest smartphone brand by shipment without a significant presence in an important market like the United States. It was also the fastest growing brand among the top 10. At this pace, we expect Huawei to remain ahead of Apple at the end of 2019,” Counterpoint Research Analyst Shobhit Srivastava said.
“What has helped Huawei is the pace of its innovations. It was the first to introduce features like reverse wireless charging, on-board AI, advanced camera, and more. A dual-brand (HONOR) strategy has helped Huawei build a youth connect and gain market share in a sluggish Chinese market,” he said.