The latest TrendForce report on global smartphone production, shows total volume for 3Q18 grew by 8% from 2Q18 to around 380 million.
Growth is attributed to a gradual recovery of demand in 2Q18 and the stock-up of inventories related to releases of new devices and holiday sales events, the market intelligence provider said.
Although the latest products from Apple and Huawei continue to generate demand in the smartphone market, the sales of new iPhone XR/XS/XS Max turned out to fall short of expectation, resulting in lower shipments of iPhones, TrendForce said.
DRAMeXchange estimates that the total production volume for 4Q18 will be roughly similar to that of 3Q18, coming to around 380 million units, TrendForce said.
“Since the general development of the smartphone market has reached the mature stage, and smartphone brands are struggling to differentiate their new products, many of which lack breakthrough features to stimulate purchases.
“Thus, consumers are less active than before with respect to replacing their existing devices.”
Smartphone makers are committing more resources in developing their high-end models, while others are raising hardware specifications to show that they are offering greater value and better performance for the cost. Nevertheless, these efforts also put the squeeze on their profit margins, TrendForce said.
There are also other variables that will make the maintenance of profitability very challenging, TrendForce said. In addition to the fluctuations in exchange rates and rising costs of components, the uncertainties produced by the ongoing US-China trade dispute are also going to impact their operation.
“At the same time, major smartphone brands will continue to enlarge their market shares at the expense of the smaller brands,” it said.
Samsung again topped the ranking in 3Q18 with a quarterly total of 74.5 million units, which also amounted to a market share of almost 20%.
While Samsung grew its sales by releasing its flagship Galaxy Note 9 ahead of schedule, the device was not a significant upgrade from last year’s Note 8 and made limited contribution to the brand’s total volume in 3Q18.
“The Galaxy J series, on the other hand, was still instrumental in sustaining the brand’s overall production. In this fourth quarter, Samsung has been promoting the Galaxy A devices, emphasising their improved cost-to-performance ratios and their cameras (i.e. the triple camera on A7 and the quad rear camera on A9).”
Samsung’s total production volume in 4Q18 is estimated to reach around 75 million units, which will be similar to the 3Q18 result and in line with the company’s target for the period.
The strong channel demand for its latest devices caused Huawei’s total smartphone production volume in 3Q18 to surge by 44% YoY to a new high of 55.5 million units.
Huawei is currently the world’s second largest smartphone brand, surpassing Apple in volume for two consecutive quarters.
“Huawei’s in-house R&D capabilities and extensive product lines across all market segments have benefitted its expansions in the overseas markets during the recent years. Huawei also continues to innovate on hardware and manufacture its own mobile SoCs via its subsidiary HiSilicon,” said TrendForce.
Going forward, Huawei will keep expanding its global presence, it said. Driven by the sales of its latest devices, Huawei’s total production volume in the 4Q18 is estimated to be on the similar level as the result of 3Q18.
And the brand’s total volume for the whole year of 2018 is currently projected to hit 200 million units, which would meet the company’s target.
Apple was behind Huawei for the second consecutive quarter as the world’s third largest brand in 3Q18, with its iPhone production volume for the period totalling 47.1 million units.
Apple’s iPhone devices for this year again intended to push the upper limit of the acceptable price range for high-end smartphones. And consumers appear to be less willing to pay for the two new AMOLED models – iPhone XS and XS Max, which are priced too high to be accepted.
“The economically priced LCD model, iPhone XR, may take over as the sales driver, but the ramp-up of its production had been scheduled to take place in 4Q18,” TrendForce said.
Looking ahead, Apple can further lower the prices of its older iPhone models to spur sales. Also, 4Q18 is expected to be the year’s peak iPhone production period, as Apple has scheduled the ramp-up of its latest models during this time.
Thus, the total iPhone production volume in 4Q18 is estimated to reach around 76 million units, which would allow Apple to surpass Huawei and compete with Samsung for the top position in the ranking, TrendForce said.
Top six global smartphone brands
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