The global smartphone market declined 1% YoY in 2019 new data from research firm Counterpoint shows.
The firm said that this is the first time that the smartphone market has declined for two consecutive years – although the decline was slower than in 2018 (4% YoY).
“2019 brought both innovations, 5G, folding displays, but also an uncertain trade and political climate. Commenting on the global market dynamics,” said Varun Mishra, an analyst at Counterpoint Research.
“There have been growing tensions among several countries that have impacted the smartphone market. For example, the US pressure on Huawei, and tensions between Japan-Korea that led to uncertainties in the memory market.
“Supply chains have been upset, causing various companies to rethink their strategies and reduce dependence on single markets. 2020 will likely see efforts to further diversify investments across geographies to mitigate risks.
“The current coronavirus outbreak in China is the latest issue to threaten supply chains.”
Despite the sanctions, Counterpoint’s data shows that Huawei surpassed Apple to become the second-largest brand in 2019.
This was the result of an aggressive push from Huawei in the Chinese market, where it achieved almost 40% market share, Counterpoint said.
China accounted for over 60% of Huawei’s total shipments. Outside China, Huawei is trying to continue selling its older devices.
But with rising competition, its value proposition is being gradually undermined. And while Huawei is working on its own operating system, it will almost impossible for it to compete with Android anywhere outside China.
Looking at the most recent quarter, Apple gained the top spot in the global smartphone market.
This was driven by the iPhone 11 series beating expectations. iPhone revenues were up year-on-year for the first time since September 2018.
“2019 also saw the deployment and initial adoption of 5G, especially in the US, Europe, China, and Korea,” said Counterpoint research analyst, Abhilash Kumar.
“With chipset players, operators and OEMs all preparing aggressively for 2020 and working towards bringing the prices of 5G down, the foundation for the 2020 growth has already been laid.
“The transition from 4G to 5G in the developed markets and the continued transition from 3G to 4G, feature phones to smartphones and upgrades will lead the smartphone market to grow in the coming year.”