Global smartphone market falls 0.4% in Q3 due to weak demand

Egham (UK), November 26 (IANS) Global sales of smartphones to end users continued to fall in the third quarter (Q3) of 2019, contracting by 0.4 per cent compared with Q3 of 2018, as demand remained weak because consumers became more concerned about getting value for money, a new report by Gartner Inc. said on Tuesday.

Despite the decline, Huawei was the only one of the top-five global smartphone vendors to achieve double-digit growth in the sales in Q3, 2019. The company sold 65.8 million smartphones, which is an increase of 26 per cent, year over year.

Its performance in China was the key driver of its global smartphone sales growth. It sold 40.5 million smartphones in China and increased its share of the country's market by almost 15 percentage points.

However, Apple recorded another double-digit decline in sales, year over year.

"For the majority of smartphone users, desire has shifted away from owning the least expensive smartphone. Today's smartphone user is opting for mid tier smartphones over premium-tier ones because they offer better value for money.

"In addition, while waiting for 5G network coverage to increase to more countries, smartphone users are delaying their purchase decisions until 2020," Anshul Gupta, Senior Research Director at Gartner, said in a statement.

This shift has led brands such as Huawei, Samsung, Xiaomi, Oppo and Vivo to strengthen their entry-level and mid tier portfolios.

This strategy helped Huawei, Samsung and Oppo grow in Q3, 2019.

Samsung maintained the top 1 position globally in Q3, 2019, by increasing its smartphone sales by 7.8 per cent, year over year.

"Samsung's aggressive revamp of its portfolio, with a focus on midtier and entry-tier segments, strengthened its competitive position," noted Gupta.

While the ban on Huawei to access key US technologies is yet to be fully implemented as a three-month extension was just announced, the proposed ban brought negativity around Huawei' brand in the international market.

Nevertheless, Huawei's strong ecosystem in China continued to show growth.

The current situation with the US has also fostered patriotism among its partners, which are now keener to promote its smartphones in China -- a development that makes it difficult for local competitors to compete aggressively against Huawei.

Apple's iPhone sales continued to decline i Q3, 2019 and it sold 40.8 million iPhones, a year-over-year decline of 10.7 per cent.

"Although Apple continued its sales promotion and discounts in various markets, this was not enough to stimulate demand globally. In the Greater China market sales of iPhones continued to improve, however, it follows a double-digit decline recorded at the beginning of the year," added Gupta.

At a time of limited technology-led innovation, product managers should focus on offering attractive features at low prices as quickly as possible. By offering better value for money, they can increase demand for smartphones, Gartner said.