Chinese smartphone maker Huawei rocks the Apple cart, but it is Samsung that should be most alarmed.
Huawei has become the world’s number-two smartphone vendor after shipping 54m handsets in the second quarter, overtaking Apple’s 41m units.
‘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’
– RYAN REITH
IDC records Samsung as selling 71.5m smartphones in the second quarter, giving it a 20.9pc global market share. However, this was down from 79.8m devices shipped around the same time last year, a 10.4pc yearly drop.
According to IDC, Huawei shipped 54.2m units, giving it a 15.8pc global market share and up 40.9pc from 38.5m a year earlier.
Apple, which reported its third-quarter financial results this week, sold 41.3m devices in the second quarter of 2018, according to IDC, giving it a 12.1pc global market share, pretty flat (0.7pc) year on year.
Canalys records Samsung as shipping 73m units in the quarter (down 8pc), Huawei as shipping 54m units (up 41pc) and Apple as shipping 41m units (up 1pc).
Canalys attributes Huawei’s strong performance in Q2 to strong sales of its latest flagship smartphone, the P20. With 7m units sold, it exceeded sales of both the P10 and P9. Huawei’s Honor brand was also a key factor, accounting for almost two-thirds of the near 16m jump it made in the quarter.
Huawei is the dark horse in the phone wars
Between the lines, Apple was pretty much buoyed by strong demand for its flagship and high-end iPhone X, which retails from $999.
Huawei appears to be carving a distinct volume advantage for devices that sell in the $600 to $800 price segment.
Samsung, while still number one globally, struggled with slower-than-normal sales, possibly due to the late launch of the flagship S9 and S9 Plus devices. It is not being helped by intense competition at the high end of an overall sluggish smartphone market.
“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, programme 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-plus) 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.”
Huawei’s strategy has evolved significantly over the last six months, said Mo Jia, a Canalys analyst based in Shanghai.
“Despite its failure to strike a US carrier partnership earlier this year, the company has turned around quickly, moving away from its drive for profitability and focusing instead on finding volume growth at the low end. Honor, which has … been a major brand in China but relatively small overseas, has taken a pivotal role in this strategy.”
Sluggish smartphone sales
Globally, smartphone sales are down 1.8pc to 342m units shipped in Q2 compared with 348.2m last year.
IDC said 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.
It 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 combination of market saturation, increased smartphone penetration rates and climbing ASPs (average selling prices) 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.”