Huawei and Xiaomi are Driving the Growth of the Smartphone Market in Q3 2018
Global smartphone sales grew 1.4 percent in the third quarter of 2018 as per the latest Gartner quarterly report. The analysts note that this increase is primarily on account of the two Chinese smartphone makers Huawei and Xiaomi.
It is undeniable that Chinese brands are slowly monopolizing the smartphone market. Generally, putting the global challenge in the most economical price band to later go also competing in the higher ranges. Huawei knows about this for a while, and the latest Gartner data seems to validate their efforts.
The sale of smartphones has increased by about 14 million since the previous quarter, but the distribution of the market has continued the trend of the previous quarter. Samsung sales saw a 14% decrease while Huawei and OPPO continue their ascent.
Huawei closing gap with Samsung
After surpassing Apple, the next goal of Huawei is to surpass is Samsung. The latest Gartner data put Samsung with 18.9% of the market and Huawei with 13.4%, so there is still a small cushion there for the South Koreans to sleep in peace.
With respect to the same quarter of last year, Samsung has lost 3.4% of its market share, adding 0.4% more to the decline of the previous quarter. All this while Huawei continues to rise, a modest 0.1% from a quarter earlier, but that is 3.9% more than a year ago.
Gartner notes that Huawei ranks first in China and among the Top 3 in many European markets. And Samsung would have reasons to worry. The gap between Samsung and Huawei continues to shrink, as Huawei is aggressively developing by investing in branding and distribution in the emerging markets of the Middle East, Asia Pacific and Africa.
If the gap is narrowing, it’s also because of the decline recorded by Samsung. Samsung is working to renew the environment and the entry-level, without reaching for the moment to reverse the trend.
Chinese strength in Europe and emerging markets
Apple share stagnates at 11.8%. However, as the numbers underline, if iPhone sales are at a standstill, its revenues have surged. In the last quarter, despite a rise in sales of less than 1%, Apple turnover jumped by nearly 30%. And the explanation is a surge in the average selling price (ASP) to 793 dollars per iPhone. A year earlier, this value was already reaching the comfortable $618.
If Apple disengages volume sales, it is also because this indicator is no longer as favorable as in the past. The Chinese Huawei and Xiaomi are the big winners of this model. By keeping only these two manufacturers in the top 5, smartphone sales would have increased by 5.2% in the last quarter, says Gartner. Only Xiaomi, Huawei and OPPO already account for a third of total smartphone sales for the previous quarter.
With low-priced smartphones, enhanced camera features and high-resolution displays, China’s leading mobile phone manufacturers have increased their sales in emerging markets in the third quarter of 2018. However, Huawei’s success demonstrates that the entry-level is not the only growth engine for Chinese manufacturers. The adoption of its P and Mate ranges is increasing, as is its brand Honor. In the last quarter, its sales increased by 43%.
Speaking of total figures, Samsung has sold this third quarter 12 million units less than in 2017, while Huawei has increased by 16 million and Xiaomi by 7 million. For the latter, the third quarter has not been the most favorable, since it has proportionally sold fewer phones than during the second, going from 8.8% of the market to 8.5%.
According to Gartner, Samsung has had problems revitalizing the sales of the Samsung Galaxy S9 and Note 9 and faces 2019 in which it will have to reorganize its mid-range to try to compete against the Chinese threat.
Can Samsung change the game in 2019? The world number one counts on its first foldable smartphone to achieve it. It should, however, start from a niche model. In addition, Huawei and others should quickly follow suit.
Nevertheless, Gartner believes that the foldable and the 5G embody future trends as likely to allow manufacturers to “differentiate the user experience on smartphones and generate a new user value.”