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Global smartphone sales decline; Huawei beats slump

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Huawei retained its spot as number two selling smartphone worldwide for Q1 2019.
Huawei retained its spot as number two selling smartphone worldwide for Q1 2019.

Smartphone sales declined worldwide in the first quarter of this year, according to research and advisory company Gartner.

It found that a total of 373 million units were sold, which represented a 2.7% decline year-on-year compared to the number of units sold in Q1 2018.

Samsung is still the top selling smartphone brand worldwide, with Chinese manufacturer Huawei coming a close second. Huawei achieved the highest year-over-year growth among the world’s top five, growing 44.5%, with smartphone sales totalling 58.4 million units.

This is despite Google announcing recently it is suspending business with Huawei that requires the transfer of hardware, software and technical services; meaning Huawei phones will no longer receive updates to their Google products.

However, this announcement was made after the first quarter ended, so it may only affect sales later in the year.

“Huawei did particularly well in two of its biggest regions, Europe and Greater China, where its smartphone sales grew by 69% and 33%, respectively,” says Anshul Gupta, senior research director at Gartner.

“Unavailability of Google apps and services on Huawei smartphones, if implemented, will upset Huawei’s international smartphone business, which is almost half of its worldwide phone business. Not the least it brings apprehension among buyers, limiting Huawei’s growth in the near-term.”

Gupta says the overall decline in smartphone sales can be attributed to slowing innovation in flagship smartphones and rising prices.

“Demand for premium smartphones remained lower than for basic smartphones, which affected brands such as Samsung and Apple that have significant stakes in high-end smartphones.”

He says Samsung saw a decline in smartphone sales of 8.8%, but remained the number one smartphone vendor worldwide. “Samsung launched its flagship Galaxy S10 smartphone portfolio, which received a good response. However, its impact was limited as Samsung only started shipping the S10 at the end of the first quarter.

“Samsung also strengthened its mid-tier and entry-tier smartphone ranges with a refreshed A series and J series and the newly introduced M series, but aggressive competition from Chinese manufacturers limited their impact.”

Sales of Apple iPhones totalled 44.6 million units in the first quarter of 2019, a decline of 17.6% year-over-year. Gupta says a cut in the price of iPhones helped drive some demand, but it was not enough. “Apple is facing longer replacement cycles as users struggle to see enough value benefits to justify replacing existing iPhones.”

South Africans opt for pricier devices

In South Africa, smartphone sales declined by more than double the global decrease for Q1 2019, at 7%. This is according to research firm GfK, which released a point-of-sale tracking data from GfK South Africa's Weekly Monitor earlier this week.

The report notes that while there was a 7% decline in smartphone sales, the value of the smartphone market climbed nearly 3% to around R8.6 billion. This means that while South Africans were buying fewer smartphones, the devices they were buying were more expensive, opting for smartphones with larger screens and better cameras.

“The smartphone market showed a marked slowdown in the first quarter of 2019, with fewer than three million units sold during this timeframe,” says Kali Moahloli, commercial head for market insights at GfK South Africa.

“Though absolute unit sales numbers are down, the migration of users towards large-screen devices with high-end features has driven revenue growth for smartphone manufacturers and retailers. With smartphones emerging as the primary Internet access device, higher-end consumers are seeking a better user experience for Web browsing, video and other applications.”

GfK South Africa also noted revenue from the local photography sector dropped by 54% in Q1. The research firm cites the proliferation of quality smartphone cameras as the culprits that continue to cannibalise this market.

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