Smartphone Sales Ended 2018 on a Down Note

Posted on February 21, 2019 by Paul Thurrott in Mobile, iOS, Android with 7 Comments

With both IDC and Gartner now weighing in, we can definitively state that the smartphone market contracted in 2018, with the shortfall worsening in the fourth quarter.

Handset makers sold approximately 392 million units in the fourth quarter, down 2.24 percent from the 401 million units sold in the year-ago quarter. For calendar year 2018, smartphone makers sold 1.48 billion handsets overall, compared to 1.5 billion the previous year. That’s a drop-off of 1.33 percent. (By comparison, PC sales fell just 1 percent in 2018 overall.)

“Demand for high-end smartphones continued to slow in the fourth quarter of 2018,” Gartner’s Anshul Gupta said in his firm’s look at the fourth quarter. “Slowing incremental innovation at the high end, coupled with price increases, deterred replacement decisions for high-end smartphones.”

“Globally the smartphone market is a mess right now,” IDC’s Ryan Reith, sounding a bit more of an alarm. “Outside of a handful of high-growth markets like India, Indonesia, Korea, and Vietnam, we did not see a lot of positive activity in 2018. We believe several factors are at play here, including lengthening replacement cycles, increasing penetration levels in many large markets, political and economic uncertainty, and growing consumer frustration around continuously rising price points.”

Samsung emerged as the world-biggest maker of smartphones, again, with about 294 million units sold. And Apple was a distant number two, with 209 million units sold. But both experienced significant drops in unit sales and market share. Samsung unit sales fell 8 percent YOY, from 319.5 million units in 2017. And Apple unit sales fell 3 percent, to 215.4 million units.

Huawei, which had briefly surpassed Apple in 2018, ended the year in third place with 204.5 million units sold, for a massive a gain of 25.5 percent. Fourth-place Xiaomi likewise saw huge growth in 2018, with unit sales hitting 122.5 million units, for an even bigger gain of 26 percent. China-based OPPO came in fifth, with 116 million units sold.


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Comments (7)

7 responses to “Smartphone Sales Ended 2018 on a Down Note”

  1. jrickel96

    Everything about the smartphone reflects an accelerated timeline of the PC side of things.

    Like PCs, now people are stretching out the upgrade cycle . They are better at taking care of their phones now and expecting a longer life for a phone. Annual upgrades are over for most and I expect most consumers now will be looking for a 3-4 year lifespan out of a phone, especially a high end phone.

    Memory, CPU, and graphics upgrades are now incremental. Price will play here, but I think most that invest in a mid-range or higher handset expect 2 years+ of usage out of a phone. Just like PCs, the lifespan will stretch out and the longer upgrade cycle will cause a reduction in prices.

    Just like PCs now settling into an easily predictable sales volume, the same will happen with phones.

    It seems people have found the balance between phone, tablet, and PC. Most all will have at least two of those and expect them to be able to last.

  2. feedtheshark

    This is good news. We're destroying the world with our consumerism. I'd love to see Apple lead on this and be green (as they claim) and move to a 2 year upgrade cycle. Who needs an S minor upgrade? Just release a new iPhone every 2 years, stop chasing profit. That way they have time to innovate more as well. We don't need all these minor changes that make no difference. What really do you need an iPhone XS for that a 6S couldn't do?