In the second quarter of 2018, Huawei surpassed Apple to secure the number-two worldwide smartphone vendor position for the first time ever, according to Gartner. Apple moved into the number-three spot. Overall, sales of smartphones to end users grew 2% in Q2 to reach 374 million units. Research director Anshul Gupta commented:
“Huawei’s smartphone sales grew 38.6% in the second quarter of 2018. Huawei continues to bring innovative features into its smartphones and expand its smartphone portfolio to cover larger consumer segments. Its investment into channels, brand building and positioning of the Honor devices helped drive sales. Huawei is shipping its Honor smartphones into 70 markets worldwide and is emerging as Huawei’s key growth driver”.
Samsung maintained the number-one global smartphone vendor spot, declining 12.7% in the second quarter of 2018. Gupta continued:
“Samsung faces slowing global smartphone demand and ever-growing competition from Chinese manufacturers. The slowing demand for its flagship smartphones left Samsung with lower profitability. It now expects the Note 9 smartphone to revive growth”.
Apple’s performance was flat in the second quarter of 2018 (0.9% growth). Gupta added:
“Minimal incremental value in Apple’s current-generation flagship iPhones led to slower growth in the second quarter of 2018. Demand for the iPhone X has started to slow down much earlier than when other new models were introduced.
Growing competition from Chinese brands and consumers’ greater expectations for phone value is putting immense pressure on Apple to deliver enhanced value on their premium iPhones to foster growth”.
Xiaomi’s focus on expanding its portfolio and adopting a unified retail model by integrating offline and online retail is driving growth in a slowing global smartphone market. This helped Xiaomi secure the number-four spot in the global smartphone market in the second quarter.
In the smartphone operating system market, Google’s Android further extended its lead over Apple’s iOS in the second quarter of 2018, securing 88% market share to 11.9% share for iOS.
Samsung is having a hard time in its branded business with its high end position in smartphones and TV both under significant pressure. On a value basis, Samsung has lost a lot of share to OLED, in particular, and if it responds to the lower prices from Huawei, it may lose value share in smartphones, as well. Fortunately for the company, the semiconductor business is doing very well (and most brands would be very happy to have its share in smartphones and TVs!). I wouldn’t bet against the company coming back in both these markets, although it will not be easy. Apple may be down in volume, but has done well to increase its ASP, so is having a good time from the revenue point of view. (BR)