Huawei and Xiaomi made huge gains in smartphone shipments the past year
IDC has released its quarterly report for the worldwide smartphone market in Q1 2018. According to preliminary data from the company’s worldwide quarterly mobile phone tracker, smartphone vendors shipped a total of 334.3 million units during Q1 2018, that resulted in a 2.9% decline when compared to the 344.4 million units shipped in the first quarter of 2017. The biggest driver of this decline was the China market, as shipment volumes in the country dropped below 100 million in the quarter for the first time since Q3 2013.
The report observed that smartphone consumers are trading up to more premium devices, but the number of new smartphone users is decreasing, which has led to decreased shipments. Also, consumers are unwilling to pay a lot of money for the latest flagship devices, despite new flagship releases from Samsung and Huawei. The high price tags of the latest flagships is said to be one reason why the upgrade cycle has been halted in the near term.
According to IDC, Samsung remained the leader in the worldwide smartphone market with 23.4 percent market share, although the company experienced a 2.4 percent decline from Q1 2017. The Galaxy S9 and the S9+ launched a quarter early compared to the S8/S8+, and they experienced “brisk initial sales” despite shipping late in the quarter, keeping the overall yearly decline at a minimum. Average selling prices (ASPs) are expected to be boosted significantly because of the launch of the S9 and the S9+. The Galaxy A and J series continued to drive most of the key volume in both developed and emerging markets.
Apple took second position in the worldwide smartphone market by shipping 52.2 million iPhones. The number represents a 2.8 percent increase year-over-year from the 50.8 million units shipped last year. There have been rumors that sales of the iPhone X have been underperforming, but according to Apple, the phone was the most popular model each week in the March quarter. The success of the device in combination with “healthy sales” of the iPhone 8/8 Plus helped grow Apple’s ASPs 11.1 percent to $728, which is up from $655 last year.
Huawei experienced impressive growth as it climbed to a market share of 11.8 percent, even as it remained in third position overall. The company has balanced a strong domestic position (as it is China’s top smartphone vendor) while slowly upscaling its brand image in international markets. Its growth rate was 13.8 percent year-over-year. Its high-end smartphones are popular in China, but the bulk of its shipments are from its budget and mid-range price segments, where it also announced a few new phones.
According to IDC, Huawei is growing and gaining market share across the Western Europe region, with particular strength in Spain, Germany, and Italy. The Lite versions continue to be the company’s bestselling devices in these markets, but the P10 and the Mate 10 range are said to be in “much better position” compared to their predecessors, and the share of the mid-range and ultra-high-end devices “improved significantly” year-over-year. The company also reintroduced its Honor brand in a couple of markets in Southeast Asia, where the high-end P series and Mate series are less popular.
Xiaomi achieved high growth rates as well, and was placed in fourth position. In Q1 2018, less than half of its shipments were domestic, the first quarter that this was the case. This is a transition that very few Chinese companies have reached, according to IDC. The report noted that Xiaomi continues its retail expansion in India and Southeast Asia. However, online channels remain the key contributor in India, the company’s second largest market. The entry-level Redmi 5A made up almost two-fifths of its volume in India, and Xiaomi recently announced that it would start PCB assembly in India.
Lastly, Oppo held on to its fifth position with a year-over-year decline of 7.5 percent. This is said to be more a result of the China slowdown than its performance in international markets, as both market share and shipment volumes increased overseas in Q1. The company has also pruned some retail partnerships to focus on those with higher contribution to sales, and to counter Xiaomi’s impressive growth in Inda, Oppo has shifted some focus to online channels. In the past, it had been focused only on offline channels.