Market Overview

Smartphone Rankings Shaken Up Once Again as Huawei Surpasses Apple, Moving into Second Position While Overall Market Declined 1.8% in Q2 2018, According to IDC

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According to preliminary data from the International Data Corporation (IDC)
Worldwide
Quarterly Mobile Phone Tracker
, smartphone vendors shipped a total
of 342.0 million units during the second quarter of 2018 (2Q18),
resulting in a 1.8% decline when compared to the 348.2 million units
shipped in the second quarter of 2017. The drop marks the third
consecutive quarter of year-over-year declines for the global smartphone
market and only the fourth quarter of decline in history. IDC believes
this is the result of churn in some highly penetrated markets, although
many high growth markets still exist and should return smartphone
shipments to overall growth.

The arrival of Huawei in the second position marks the first quarter
since 2Q10 where Apple has not been the number one or two smartphone
company in terms of market share. Huawei delivered shipments of 54.2
million units to move into the second position with a record high market
share of 15.8%. Samsung maintained a comfortable lead, although
indications from its recent 2Q18 earnings call suggest its mobile
division revenues will face challenges moving forward.

"The continued growth of Huawei is impressive, to say the least, as is
its ability to move into markets where, until recently, the brand was
largely unknown," said Ryan
Reith
, program vice president with IDC's Worldwide
Mobile Device Trackers
. "It is worth noting that Apple moved into
the top position each of the last two holiday quarters following its
product refresh, so it's likely we'll see continued movement among the
top ranked companies in 2018 and beyond. For most markets, the
ultra-high end ($700+) competition is largely some combination of Apple,
Samsung, and Huawei, depending on the geography, and this is unlikely to
change much in the short term. At the same time, Xiaomi, OPPO, and vivo
are all slowly pushing their customer base upstream at a price tier
slightly lower than the top three. This is an area they should all watch
closely as the builds in this segment are getting increasingly more
advanced."

"The combination of market saturation, increased smartphone penetration
rates, and climbing ASPs continue to dampen the growth of the overall
market," said Anthony
Scarsella
, research manager with IDC's Worldwide
Quarterly Mobile Phone Tracker
. "Consumers remain willing to pay
more for premium offerings in numerous markets and they now expect their
device to outlast and outperform previous generations of that device
which cost considerably less a few years ago. To contest this slowdown,
vendors will need to focus on new innovative features and form factors
combined with incentives and promotions to drive growth in many of these
highly competitive markets moving forward."

Smartphone Company Highlights

Samsung once again remained the leader in the worldwide
smartphone market despite a 10.4% decline in shipments from last year.
The flagship S9/S9+, which launched late in the first quarter, witnessed
slower than normal sales according to Samsung. Samsung claims the
slowdown is due to both intensified competition at the high end and an
overall sluggish smartphone market. The Korean giant will look to
bolster sales in the coming weeks as we await the arrival of the new
Galaxy Note 9. The new Note will be unveiled on August 9th and is
expected to launch earlier than the Note 8 to gain a foothold ahead of
pending fall launches from Apple and others. The device is expected to
feature a bigger battery, new S-Pen capabilities, and increased
performance.

Huawei surpassed Apple for the first time to move into the second
position based on global market share. It continues to lead the China
smartphone market with a record-high market share of 27.0% in 2Q18. In
the first half of this quarter, Huawei's P20/P20 Pro series found strong
demand in the $600-$800 price segment, helping Huawei build a high
profile in the market. In the second half, with the release of its "GPU
Turbo" technology, Huawei continued to earn a good reputation. 618
promotions led to strong sales for Honor models in the online channels
as the Honor brand continues to be a key driver of growth for the
Chinese tech giant.

Apple dropped to the third spot for the first time despite its
second quarter growth. Apple shipped 41.3 million iPhones, representing
modest growth of 0.7% over the 41.0 million units shipped last year. The
iPhone continued to perform well at the high end as the iPhone X remains
a top seller in many markets. Apple will look to regain control of the
market this fall with the expected launch of three next generations of
iPhone models. The new models are rumored to bring different screens
sizes, price points, increased performance, and new features to the
table when they arrive next quarter.

Xiaomi has pulled ahead of Samsung for the number 1 position in
India over the past few quarters and has now closed the gap with Samsung
in Indonesia as it ramped up its local production to address the
increased demand during Ramadhan period, while also expanding its online
channel presence and opening up more Mi home stores in the country.

OPPO faced a slowdown in key markets like India and most of
Southeast Asia as it eased back on its aggressive marketing and sales
activities in the region. Despite this, the company still managed to
grow 5.1% over last year as it continued its expansion into other
markets such as the Middle East & Africa. The recent launch of the Find
X has also garnered Oppo some praise as the innovative, bezel-less and
notch-less design has grabbed the attention of many.

 

Worldwide Smartphone Market, Top 5 Company Shipments, Market
Share, and Year-over-

Year Growth, Q2 2018
(shipments in millions)

Vendor    

2Q18
Shipments

   

2Q18 Market
Share

   

2Q17
Shipments

   

2Q17 Market
Share

   

Year-Over-
Year Change

1. Samsung     71.5     20.9%     79.8     22.9%     -10.4%
2. Huawei     54.2     15.8%     38.5     11.0%     40.9%
3. Apple     41.3     12.1%     41.0     11.8%     0.7%
4. Xiaomi     31.9     9.3%     21.4     6.2%     48.8%
5. OPPO     29.4     8.6%     28.0     8.0%     5.1%
Others     113.7     33.2%     139.5     40.1%     -18.5%
Total     342.0     100.0%     348.2     100.0%     -1.8%
Source: IDC Worldwide Quarterly Mobile Phone Tracker, July 31, 2018
 

Notes:

  • Data are preliminary and subject to change.
  • Company shipments are branded device shipments and exclude OEM sales
    for all vendors.
  • The "Company" represents the current parent company (or holding
    company) for all brands owned and operated as a subsidiary.

In addition to the table above, a graphic illustrating the worldwide
market share for the top 5 smartphone companies over the previous five
quarters is available by viewing this
press release on IDC.com
.

About IDC Trackers
IDC Tracker products provide accurate and
timely market size, vendor share, and forecasts for hundreds of
technology markets from more than 100 countries around the globe. Using
proprietary tools and research processes, IDC's Trackers are updated on
a semiannual, quarterly, and monthly basis. Tracker results are
delivered to clients in user-friendly excel deliverables and on-line
query tools.

For more information about IDC's Worldwide Quarterly Mobile Phone
Tracker, please contact Kathy Nagamine at 650-350-6423 or knagamine@idc.com.

About IDC
International Data Corporation (IDC) is the
premier global provider of market intelligence, advisory services, and
events for the information technology, telecommunications, and consumer
technology markets. With more than 1,100 analysts worldwide, IDC offers
global, regional, and local expertise on technology and industry
opportunities and trends in over 110 countries. IDC's analysis and
insight helps IT professionals, business executives, and the investment
community to make fact-based technology decisions and to achieve their
key business objectives. Founded in 1964, IDC is a wholly-owned
subsidiary of International Data Group (IDG),
the world's leading media, data and marketing services company that
activates and engages the most influential technology buyers. To learn
more about IDC, please visit www.idc.com.
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