June 25, 2019
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Global smartphone growth stalled in Q4, up just 1.2% for the full year: Gartner

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Gartner’s smartphone marketshare data for the just gone holiday quarter highlights the challenge for device makers going into the world’s biggest mobile trade show which kicks off in Barcelona next week: The analyst’s data shows global smartphone sales stalled in Q4 2018, with growth of just 0.1 per cent over 2017’s holiday quarter, and 408.4 million units shipped.

tl;dr: high end handset buyers decided not to bother upgrading their shiny slabs of touch-sensitive glass.

Gartner says Apple recorded its worst quarterly decline (11.8 per cent) since Q1 2016, though the iPhone maker retained its second place position with 15.8 per cent marketshare behind market leader Samsung (17.3 per cent). Last month the company warned investors to expect reduced revenue for its fiscal Q1 — and went on to report iPhone sales down 15 per cent year over year.

The South Korean mobile maker also lost share year over year (declining around 5 per cent), with Gartner noting that high end devices such as the Galaxy S9, S9+ and Note9 struggled to drive growth, even as Chinese rivals ate into its mid-tier share.

Huawei was one of the Android rivals causing a headache for Samsung. It bucked the declining share trend of major vendors to close the gap on Apple from its third placed slot — selling more than 60 million smartphones in the holiday quarter and expanding its share from 10.8 per cent in Q4 2017 to 14.8 per cent.

Gartner has dubbed 2018 “the year of Huawei”, saying it achieved the top growth of the top five global smartphone vendors and grew throughout the year.

This growth was not just in Huawei “strongholds” of China and Europe but also in Asia/Pacific, Latin America and the Middle East, via continued investment in those regions, the analyst noted. While its expanded mid-tier Honor series helped the company exploit growth opportunities in the second half of the year “especially in emerging markets”.

By contrast Apple’s double-digit decline made it the worst performer of the holiday quarter among the top five global smartphone vendors, with Gartner saying iPhone demand weakened in most regions, except North America and mature Asia/Pacific.

It said iPhone sales declined most in Greater China, where it found Apple’s market share dropped to 8.8 percent in Q4 (down from 14.6 percent in the corresponding quarter of 2017). For 2018 as a whole iPhone sales were down 2.7 percent, to just over 209 million units, it added.

“Apple has to deal not only with buyers delaying upgrades as they wait for more innovative smartphones. 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,” said Gartner’s Anshul Gupta, senior research director, in a statement.

“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,” he added.

Further down the smartphone leaderboard, Chinese OEM, Oppo, grew its global smartphone market share in Q4 to bump Chinese upstart, Xiaomi, and bag fourth place — taking 7.7 per cent vs Xiaomi’s 6.8 per cent for the holiday quarter.

The latter had a generally flat Q4, with just a slight decline in units shipped, according to Gartner’s data — underlining Xiaomi’s motivations for teasing a dual folding smartphone.

Because, well, with eye-catching innovation stalled among the usual suspects (who’re nontheless raising high end handset prices), there’s at least an opportunity for buccaneering underdogs to smash through, grab attention and poach bored consumers.

Or that’s the theory. Consumer interest in ‘foldables’ very much remains to be tested.

In 2018 as a whole, the analyst says global sales of smartphones to end users grew by 1.2 percent year over year, with 1.6 billion units shipped.

The worst declines of the year were in North America, mature Asia/Pacific and Greater China (6.8 percent, 3.4 percent and 3.0 percent, respectively), it added.

“In mature markets, demand for smartphones largely relies on the appeal of flagship smartphones from the top three brands — Samsung, Apple and Huawei — and two of them recorded declines in 2018,” noted Gupta.

Overall, smartphone market leader Samsung took 19.0 percent marketshare in 2018, down from 20.9 per cent in 2017; second placed Apple took 13.4 per cent (down from 14.0 per cent in 2017); third placed Huawei took 13.0 per cent (up from 9.8 per cent the year before); while Xiaomi, in fourth, took a 7.9 per cent share (up from 5.8 per cent); and Oppo came in fifth with 7.6 per cent (up from 7.3 per cent).

Gartner finds PC sales doldrums continued in 2018

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Gartner released its quarterly PC sales survey for the fourth quarter of 2018 this week, and it was the same old story. PC sales plunged in the fourth quarter and were down 1.3 percent for the year. The three top players — HP, Dell and Lenovo — accounted for 63 percent of sales worldwide in the quarter.

The company found in their preliminary sales research that worldwide sales totaled totaled 68.6 million units in the fourth quarter. That may sound like a big number, but it’s down 4.3 percent over the same period last year.

Gartner principal analyst Mikako Kitagawa said after a couple of quarters of modest growth, the market began to slow down again for a number or reasons including political and economic uncertainty and a CPU shortage. “There was even uncertainty in the U.S. — where the overall economy has been strong — among vulnerable buyer groups, such as small and midsize businesses (SMBs). Consumer demand remained weak in the holiday season. Holiday sales are no longer a major factor driving consumer demand for PCs,” she said in a statement.

That could be because consumers are spending much more time on mobile phones. Many tasks whether shopping, email, banking or social media that once required a home PC can easily be done on a mobile phone now, leaving PCs to the realm of business where it isn’t always practical to do work on a smaller footprint. In fact, Black Friday online shopping totaled $6.1 billion this year with mobile phones accounting for $2.1 billion.

The trade war that has adversely affected Apple and other tech companies probably also had an impact on the PC market.

Lenovo was the biggest winner in the worldwide report, achieving 24.2 percent of marketshare with number of units sold up 5.9 percent from last year. HP had 22.4 percent marketshare but its numbers were down -4.4 percent. Dell came in third with 15.9 percent with marketshare up a modest 1.4 percent.

Chart: Courtesy of Gartner

In the US, sales were even worse, down 4.5 percent, as small business buyers stayed away in the quarter. “The fourth quarter is typically a buying season for small office/home office (SOHO) and small business buyers in the U.S. as they want to use up the untouched budget before the tax year ends,” Kitagawa explained in the report. Unfortunately, they didn’t seem to do that this year.

Chart: Courtesy of Gartner

The top three vendors in US sales were HP with 33.4 percent marketshare, growth down -7.6 percent; Dell with 25.7 percent, growth up 0.9 percent and Lenovo with 15.2 percent, growth up a whopping 23.4 percent for the quarter, making it the big winner in the US market in terms of sales growth.

In case you’re wondering, Apple, which was forced to issue new guidance for Q12019 earnings last week due to lower iPhone sales, also had softer PC sales last quarter with numbers down 2.1 percent in the US and 3.8 percent worldwide. Gartner found that Apple PCs account for 12.4 percent of marketshare in the US and 7.2 percent worldwide.

The report is based on data from sales of desktop PCs, notebooks and devices such as the Microsoft Surface, but excludes Chromebooks and iPads. Gartner is careful to point out these are preliminary numbers and they could change once the final data is in.

Huawei bags Apple’s 2nd place spot in global smartphone sales: Gartner

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Another analyst has Huawei overtaking Apple in the global smartphone rankings for the second quarter this year. The latest figures from Gartner put Huawei ahead on sales to end users in Q2.

Overall, Gartner says sales of smartphones to end users grew 2% in the quarter, to reach 374 million units.

The analyst pegs the Chinese smartphone maker with a 13.3% marketshare, saying it sold ~49.8M devices in the quarter, up from 9.8% in the year before quarter — ahead of Apple, which it calculates took an 11.9% marketshare (down from 12.1% in Q2 2017), selling ~44.7M iPhones.

According to Gartner’s figures, Samsung also lost share year-over-year — declining 12.7% in the quarter.

The Galaxy smartphone maker retained its no.1 spot in the rankings, with 19.3% in Q2 (vs 22.6% in the equivalent quarter last year) and ~72.3M devices sold. Though Gartner notes it’s being squeezed by “ever-growing competition from Chinese manufacturers”, while slowing demand for its flagships are squeezing its profitability. Not a happy combination.

In recent years Huawei has been one of a handful of Chinese OEMs bucking the trend of a slowing global smartphone market. And Gartner’s data suggests Huawei’s smartphone sales grew 38.6 per cent in the second quarter.

As we noted earlier this month, when other analysts reported Huawei outstripping Apple on smartphone shipments in Q2, the handset maker has built momentum for its mid-range Honor handset brand while performing solidly at the premium end too, with devices such as the P20 Pro (albeit while copypasting Apple’s iPhone X ‘notch’ screen design in that instance.)

“Huawei continues to bring innovative features into its smartphones and expand its smartphone portfolio to cover larger consumer segments,” said research director Anshul Gupta in a statement. “Its investment into channels, brand building and positioning of the Honor devices helped drive sales. Huawei is shipping its Honor smartphones into 70 markets worldwide and is emerging as Huawei’s key growth driver.”

For Apple the quarter was a flat one (0.9% growth), though that’s to be expected given Cupertino structures its mobile release cycle around a big-bang annual smartphone refresh in the fall, ahead of the holiday quarter, rather than releasing devices throughout the year.

Even so, Gupta noted that Apple is also facing growing competition from Chinese brands, which in turn is amping up pressure on the company to innovate its handsets to keep increasingly demanding consumers happy by delivering “enhanced value” in exchange for the iPhone’s premium price.

And recent reports have suggested Apple is prepping a number of iPhone design changes for fall, including a splash of color.

“Demand for the iPhone X has started to slow down much earlier than when other new models were introduced,” he added, sounding another note of concern for Apple.

Fourth placed Chinese OEM Xiaomi is one device maker putting pressure on longer term players in the smartphone market. In Q2 Gartner reckons the company sold ~32.8M devices, carving itself an 8.8% marketshare — up from 5.8% in the year ago quarter.

The analyst’s data also shows Google’s Android operating system further extending its lead over Apple’s iOS in Q2, securing 88% market share vs 11.9% for iOS.

While the smartphone market is no longer a simple duopoly on the device maker front, with Huawei elbowing past Apple to bag the second spot in the global rankings, it remains very much the opposite story where smartphone operating systems are concerned.

And Gartner’s data now records the ‘other’ category of smartphone OSes at a 0.0% marketshare, down from 0.1% in the year ago quarter…

Global wearables market to grow 17% in 2017, 310M devices sold, $30.5BN revenue: Gartner

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Analyst Gartner is expecting to see growth of 16.7 per cent, year-over-year, across the global wearables market this year, which encompasses a variety of device types and form factors — from smartwatches to body-worn cameras and even head-mounted displays.

Its forecast projects sales of 310.4M wearable devices worldwide this year, generating a total of $30.5BN in revenue — of which it expects $9.3BN to come from the smartwatch category specifically, where the Apple Watch currently leads over rivals like Samsung’s Gear smartwatch.

Apple is expected to announce a new model of its smartwatch this September — adding direct cellular connectivity and meaning the Apple Watch will be able to support using its Siri voice assistant, messaging and transferring sensor data without needing an iPhone in close proximity — thereby expanding its utility and potentially giving the product’s prospects with consumers a boost.

The company does not break out unit sales of the Watch, but reporting its latest earnings earlier this month CEO Tim Cook said sales of the wearable were up 50 per cent, year-over-year. (Apple reports earnings for Watch within an ‘other products’ category — which also includes the likes of Apple TVs, Beats electronics devices, iPods and Apple-branded accessories — and the category as a whole earned it $2.74BN in its last quarter.)

Gartner says it expects a total of 41.5M smartwatches to be sold this year, adding that the device type is “on pace” to account for the highest unit sales of all wearable form factors from 2019 to 2021, with the exception of Bluetooth headsets.

By 2021, Gartner estimates that sales of smartwatches will total nearly 81M units — representing 16 per cent of total wearable device sales, according to its forecast.

It notes that smartwatch revenue is bolstered by the relatively stable average selling prices (ASPs) of Apple Watch — a wrist-mounted wearable whose entry price starts at $269.

“The overall ASP of the smartwatch category will drop from $223.25 in 2017 to $214.99 in 2021 as higher volumes lead to slight reductions in manufacturing and component costs, but strong brands such as Apple and Fossil will keep pricing consistent with price bands of traditional watches,” noted Gartner research director, Angela McIntyre, in a statement.

While expecting Apple to continue to lead the smartwatch category, Gartner predicts Cupertino’s share will decline in the coming years — dropping from approximately a third in 2016 to a quarter in 2021 — as more providers enter the market. (Though other brands, such as Asus, Huawei, LG, Samsung and Sony, will still have a lower share — it’s expecting they will account for only 15 per cent in 2021.)

Interestingly, smartphones for children is a sub-category that Gartner’s expecting to perform well — representing 30 per cent of total smartwatch unit shipments in 2021, according to its calculations.

These are wearables aimed at children in the two to 13 year-old range, with makers targeting parents who don’t yet want their child to have a fully fledged smartphone.

The analyst also expects uplift in the traditional watch brand/luxury/fashion smartwatch segment — which it forecasts accounting for 25 percent of smartwatch units by 2021 — as long-standing brands attempt to attract younger customers.

Meanwhile, startup and while-label smartwatch brands, such as Archos, Cogito, Compal, Martian, Omate and Quanta, which will account for five per cent of unit sales in 2021.

Elsewhere in the wearables space, Bluetooth headsets will remain the biggest sub-category, accounting for almost half (48 per cent) of all wearables sold in 2017. The analyst also expects the audio devices to continue to be the most sold type of wearables through 2021, when it projects sales of 206M.

Growth here is being driven by the elimination of the headphone jack by “major smartphone providers”, according to Gartner. And while Apple kicked off that shift — and does of course have a pair of Bluetooth-powered, Siri-primed, premium-priced wireless earbuds to sell you instead (AirPods) — the analyst’s assumption is that by 2021 almost all premium mobile phones will no longer have the 3.5 mm jack. RIP trusty old pairs of headphones the world over.

Meanwhile, one of the tiddler technologies of today’s wearable market — head-mount displays (HMDs) which support augmented reality applications that do not fully block the wearer’s vision (as a full VR headset does) — will continue to be a small player through the next five or so years, according to the analyst.

Gartner forecasts that HMDs will account for just 7 per cent of all wearable devices shipped this year, and says they will not reach mainstream adoption with consumers or industrial customers through 2021. (Which amounts to a bearish view on AR startup Magic Leap‘s near-term prospects — the company still doesn’t have a wearable in the market, though its founder has hinted one could be coming this year.)

Near-term opportunities for HMDs that Gartner points to include: for video game players; for various industrial and business use-cases such as for workers performing equipment repair, inspections and maintenance, or to help with manufacturing, training, design and customer interactions; as well as for entertainment use-cases such as in theme parks, theaters and sports venues, to enhance an experience or provide supplementary information.

“Current low adoption by mainstream consumers shows that the market is still in its infancy, not that it lacks longer-term potential,” added McIntyre of HMDs.

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