Smartphone sales decline for first time ever

  • Smartphone sales decline for first time ever

Smartphone sales decline for first time ever

Chinese telecom companies Huawei Technologies Co., Ltd. and Xiaomi Inc. are among the top five global vendors of smartphones that recorded growth in smartphone sales in the fourth quarter of 2017, the world leading market research firm Gartner said on Thursday.

Samsung's profit and average selling price could improve if its next flagship phones, the successors to its Galaxy series which are expected to launch this year, are successful. Gartner began tracking smartphone market since 2004 and it is the first time that a decline has been noticed in smartphones sales worldwide.

Apple's decline is also accounted for the fact that the availability of iPhone X got late which made switching to a new phone impossible for the users for quite some time. Handset makers sold almost 408 million smartphones to customers in the fourth quarter, down 5.6 percent from the same period a year ago, the research firm said Thursday.

Several major factors caused the market shrinkage, said Anshul Gupta, research director at Gartner.

The market researcher blamed the market contraction on a lack of quality low-priced smartphones, to win over feature phone users, as well as a longer replacement cycle for existing smartphone users, as new models offer few major improvements. And people who already own smartphones are upgrading to higher-end models and holding onto them longer, he added. "Moreover, while demand for high quality, 4G connectivity and better camera features remained strong, high expectations and few incremental benefits during replacement weakened smartphone sales", Gupta added.

The decline in fourth quarter 2017 sales is the first year-on-year decline as consumers were slower to upgrade their devices, this was despite Apple rolling out a new iPhone 8 offering along with their ill-fated iPhone X. Second, component shortages ansd manufacturing capacity constraints preceded a long delivery cycle for the iPhone X, which returned to normal by early December 2017.

"We expect good demand for the iPhone X to likely bring a delayed sales boost for Apple in the first quarter of 2018". With Huawei's new smartphone additions in the quarter, including Mate 10 Lite, Honor 6C Pro and Enjoy 7S, the vendor broadened the appeal of its smartphones. While the leaders in the market (Samsung and Apple) did see a decline over this time period, others (Huawei and Xiaomi) saw an increase.

Coming back to the smartphones sales, on a year on year basis as per Gartner, the overall smartphones sales passed 1.5 billion units in 2017 which is 2.7% increase from 2016.

For smartphone operating systems, Android's lead grew by 1.1 percentage points to 86 percent.