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The bigger they are, the harder they fall: Peak smartphone hits Apple, Samsung the worst

Chinese upstarts fill in the gaps

The two biggest brands in the West are the two biggest losers as the smartphone slump continues, analyst Gartner has found.

Apple and Samsung both shouldered major market share losses: Samsung down from 20.9 per cent globally to 19 per cent, and Apple down from 14 per cent to 13.4 per cent. Huawei, Oppo and Xiaomi all took advantage at the expense of the big two and "others".

Apple's smartphone sales fell 11.8 per cent in the fourth 2018 quarter compared to the year before, the largest drop Gartner had recorded since Q1 2016. But it was more dramatic in China: down from 14.6 per cent market share in Q4 2017 to 8.8 per cent in Q4 2018, with annual sales of just over 209 million units.

Worldwide smartphone sales to end users by vendor in fy2018

Vendor 2018 units 2018 market share 2017 units 2017 market share
Samsung 295,043.7 19% 321,263.3 20.9%
Apple 209,048.4 13.4% 214,924.4 14%
Huawei 202,901.4 13.1% 150,534.3 9.8%
Xiaomi 122,387.0 7.9% 88,926.8 5.8%
OPPO 118,837.5 7.6% 112,124.0 7.3%
Others 607,049.0 39% 648,762.7 42.2%
Total 1,555,267.0 100% 1,536,535.5 100%

Numbers are in thousands of units. Source: Gartner (due to rounding, numbers may not add up precisely to the totals shown)

Anshul Gupta, senior research director at Gartner, said that consumers in emerging markets were more confident in buying better-value phones from Chinese phone makers.

"OnePlus, Oppo, Vivo are still 30 per cent cheaper compared to Samsung and Apple, but have equally good features. [Previously] consumers wanted to show off a Samsung or an Apple. Now they are no longer shy of buying an Oppo or Huawei phone," he told us.

Samsung has "responded well", Gupta added, by improving its midrange. The J and A series are much smarter, with triple-sensor camera rigs previously allotted to the flagships. And the M series has been devised to head off the competition.

But a stronger retail presence and brand has swung the market towards the challengers.

Worldwide smartphone sales to end users by vendor in Q4 2018

Vendor Q4 2018 units Q4 2018 market share Q4 2017 units Q4 2017 market share
Samsung 70,782.5 17.3% 74,026.6 18.2%
Apple 64,527.8 15.8% 73,175.2 17.9%
Huawei 60,409.8 14.8% 43,887.0 10.8%
OPPO 31,589.9 7.7% 25,660.1 6.3%
Xiaomi 27,843.6 6.8% 28,187.8 6.9%
Others 153,205.0 37.5% 162,908.8 39.9%
Total 408,358.5 100% 407,845.4 100%

Gupta reckoned innovation in top-end flagships, what are called "hero" phones, can help improve sales lower down the portfolio, but phone makers need to show these innovations are worthwhile. "Samsung has been unable to capitalise on S8 and S9 and Note flagships," he said.

Apple won't mind so much. "It looks at market value, not market share. They've never wanted to capture the first-time buyer," Gupta noted.

And he doesn't expect flexible displays to be a game changer – at least not right away.

Worldwide, phone sales grew just 0.1 per cent to 408.4 million units. ®

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