Global sales of smartphones to end-users increased by 1.3% during the first quarter of the year to 384-million, market research multinational Gartner reported on Tuesday.
Huawei and Xiaomi experienced the most growth during the quarter, and Apple returned to growth after sales declined during the final quarter of 2017.
“Demand for premium and high-end smartphones continued to suffer owing to marginal, incremental benefits during upgrade. Demand for entry-level smartphones (sub-$100) and low- to midtier smartphones (sub-$150) improved as a result of better-quality models,” said Gartner research director Anshul Gupta.
Samsung's midtier smartphones faced continued competition from Chinese brands, which led to unit sales contracting year-on-year, despite the earlier launch of its flagship Galaxy S9/S9+ and the Note 8 having a positive impact on Samsung sales in the first quarter of this year.
“Samsung's smartphone growth rate will remain under pressure throughout this year, with Chinese brands’ growing dominance and expansion into Europe and Latin America markets. Samsung is challenged to raise the average selling price of its smartphones, while facing increasing competition from Chinese brands that are taking more market share,” Gupta said.
“Even though demand for Apple's iPhone X exceeded that of iPhone 8 and iPhone 8 Plus, the vendor struggled to drive significant smartphone replacements, which led to slower-than-expected growth in the first quarter of this year. The delayed sales boost for Apple from [the fourth quarter of 2017] materialised. Apple's smartphone unit sales returned to growth in the first quarter of this year, with an increase of 4% year-on-year,” he noted.
With its exclusive focus on premium smartphones, Apple needs to significantly raise the overall experience of its next-generation iPhones to trigger replacements and secure solid growth in the near future, he added.
Meanwhile, Huawei's refreshed smartphone portfolio helped strengthen its number three global smartphone vendor position.
“Achieving 18.3% growth in the first quarter of 2018 helped Huawei close the gap with Apple. However, its future growth increasingly depends on the vendor ramping up share in emerging Asia-Pacific and resolving issues in the US market through the development of a stronger consumer brand.
Further, Huawei's attempt to grow its premium smartphone portfolio with its recent launches of the P20, P20 Pro and Honor 10 helps raise its competitiveness and growth potential, he noted.
Xiaomi achieved growth of 124% year-on-year. Its refreshed portfolio of smartphones and aggressive pricing strategy helped it hold the number four spot in the first quarter of this year, noted Gupta.
“This strategy led Xiaomi to achieve 330% growth in the emerging Asia-Pacific region,” he said.
In the smartphone operating system market, Google's Android and Apple's iOS achieved growth in units in the first quarter of this year, but Android saw its market share contract slightly.
Weakness in Greater China's mobile phone market also limited growth potential for global brands, including Chinese brands such as OPPO and Vivo, with over 70% of their sales coming from Greater China.