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Huawei takes a bite out of Apple: the smartphone sales battle

Gartner data shows lower-than-expected smartphone sales in the 2018 holiday quarter. Apple sales fell unsurprisingly; Huawei sales climbed surprisingly.

Apple weathered an 11.8 percent quarterly decline in the fourth quarter of 2018 Samsung witnessed a 7.2 percent dip in sales in 2018, compared to the previous year Huawei's market share in 2018 rose to 13 percent from 9.8 percent the previous year

Consumers have started calling out Apple and Samsung for their high price tags.

Although sales of smartphones were lower than expected globally in 2018, Apple had to cope with its biggest iPhone sales drop in three years during the fourth quarter of 2018, according to the latest Gartner research. On the other hand, Huawei, Xiaomi and Oppo are quickly narrowing the gap by attracting consumers with mid-range phones.

Smartphone sales to end users slowed down in the holiday quarter to a total of 408.4 million units sold in 2018, which was merely 0.1 percent better than sales in the same period of 2017, data from Gartner indicates.

Source: Gartner data


“Demand for entry-level and midprice smartphones remained strong across markets, but demand for high-end smartphones continued to slow in the fourth quarter of 2018. Slowing incremental innovation at the high end, coupled with price increases, deterred replacement decisions for high-end smartphones. This led to a flat-growth market in the fourth quarter of 2018,” said Anshul Gupta, senior research director, Gartner. 

Tough times at the top

Although Samsung and Apple still rank the highest in the smartphone world in terms of market share, things aren't looking too pretty at the top.

Apple weathered an 11.8 percent quarterly decline. Samsung, meanwhile, extended its lead as the top smartphone company in the world, but still saw a 7.2 percent dip in sales in 2018, compared to the previous year, data from Canalys shows.

“Apple has to deal not only with buyers delaying upgrades as they wait for more innovative smartphones, but it also continues to face compelling high-price and midprice smartphone alternatives from Chinese vendors. Both these challenges limit Apple’s unit sales growth prospects,” Anshul Gupta said.

Shipments from Apple and Samsung declined 7 percent and 5 percent respectively in the fourth quarter of 2018, according to a Canalys study.

This slowdown in growth comes as no surprise with most consumers unwilling to invest big sums of money in marginally better features. Game-changing innovations in smartphones are no longer the norm, with consumers choosing affordable options.

The biggest indicator has been the slump in demand from China and emerging markets. The first telling decline of 2.5 percent was observed in 2017, followed by a further 4.1 percent drop in smartphone sales in 2018, Bloomberg reported.

Stealing the limelight

While the world has been focusing on the fall of the mighty, mid-level vendors such as Huawei and Xiaomi have bucked the trend to achieve strong growth.

Huawei's market share in 2018 rose to 13 percent from 9.8 percent the previous year while Xiaomi captured 7.9 percent of the market share in 2018 – a 2.1 percent increase from 2017, Gartner data indicates.

This shows that Huawei's consumers have concentrated on the value of its smartphones instead of paying heed to the negative press surrounding the arrest of Huawei CFO Meng Wanzhou amid a U.S.-China trade and political tensions.

Source: Gartner data


“Beyond its strongholds of China and Europe, Huawei continued to increase its investment in Asia-Pacific, Latin America, and the Middle East, to drive further growth. Huawei also exploited growth opportunities through continued expansion of the Honor series in the second half of 2018, especially in emerging markets," Anshul Gupta said.

North America, mature Asia-Pacific, and Greater China recorded the worst declines of the year, at 6.8 percent, 3.4 percent, and 3.0 percent, respectively, the Gartner reveals. Meanwhile, the rising Chinese smartphone players have been making the most of emerging markets such as India, China, and Latin America.