Smartphone Sales Indicate Market Is Now In a Recession, Analysts Say

Angela Lang  CNET

Angela Lang CNET

Global smartphone shipments fell for the fourth consecutive quarter in July to September, accelerating to a 6.0 percent year on year decline (1.8% in Q2) according to the latest report from IDC. "It can be attributed to a weakening demand in developed markets like China, the USA and Western Europe which account for nearly half of smartphone sales globally", Pathak noted. Xiaomi continues to slow, due to intensified competition from Huawei in its key markets of India and China.

However, IDC said it still thinks the global market will return to growth next year, as people refresh their handsets.

Linda Sui, Director at Strategy Analytics, said: "Global smartphone shipments tumbled 8 per cent annually from 393.1 million units in Q3 2017 to 360.0 million in Q3 2018". The company is also competing hard against Xiaomi, which previous year almost doubled its market share but was held to just 9% growth in 2018.

Smartphone shipments are continuing to decline according to a preliminary report from the International Data Corporation's (IDC) Worldwide Quarterly Mobile Phone Tracker.

As for Apple, Strategy Analytics said the company's new iPhone products are in "healthy demand", but the high price stands as a hurdle in its efforts to expand shipment volume. IDC points out that Samsung's dominance in the smartphone space is under pressure "from all directions" thanks to the rapid growth of competitors emerging markets.

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Huawei's smartphone shipments soared by 32.9 percent in the third quarter to once again surpass Apple as the world's second largest smartphone brand with 52.0 million sales and a 14.6 percent market share compared to Samsung's 20.3 percent and Apple's 13.2 percent.

The figures confirm Counterpoint Research's prediction that the global smartphone market will contract for the first time this year.

While the overall smartphone market has declined for four straight quarters, two things stand out as major factors in the third quarter. However, the company reached the highest number of shipments ever in India.

The next growth cycle in developed markets will likely be driven by the emergence of commercially available 5G, which is still some quarters away, the analyst added.

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