Research and advisory company Gartner says that global sales of smartphones to end users declined 1.7% in the second quarter of 2019, totalling 368 million units.
“Demand for high-end smartphones has slowed at a greater rate than demand for midrange and low-end smartphones,” said Anshul Gupta, senior research director at Gartner.
“To try to boost smartphone replacements, we’ve seen manufacturers bringing premium features such as multilens front/back cameras, bezel-less displays and large batteries from their flagship smartphones into lower-priced models.”
Among the top five global smartphone vendors, Huawei and Samsung exhibited the strongest annual sales increases in the second quarter of 2019 at 16.5% and 3.8%, respectively.
“As a result, they both grew market share in the quarter, which led them to account for more than a third of total smartphone sales globally,” said Gupta.
Gartner said that the Huawei ban announced by the Trump administration, as part an escalating trade war with China, led to a sharp decline in Huawei’s smartphone sales in the global market in the second quarter of 2019, although sales did improve slightly on the ban’s deferment.
While its smartphone sales total was weaker globally, strong promotion and brand positioning helped Huawei sell a record number of smartphones in Greater China in the quarter, growing 31% in the region, Gartner said.
Huawei said last week that the impact of US trade restrictions on its business will be less than initially stated, but will still have a negative impact, lowering its smartphone business revenue by approximately $10 billion in 2019. This is far less than the $30 billion Huawei founder and CEO Ren Zhengfei had predicted in June.
Bloomberg reported that Huawei is seeking to develop alternatives after coming under intense pressure from the Trump Administration, which has argued its technology represents a security threat.
On Friday, it introduced its most powerful artificial intelligence chipset, the Ascend 910, which is poised to rival some of the best offerings from Qualcomm Inc and Nvidia Corp. Earlier this month, it offered the first glimpse of an in-house software – HarmonyOS – that may someday replace Google’s Android.
“Since May, Huawei has occupied the uncomfortable position of being both an established global brand and a member of the US Entity List, which bars it from trading freely with American suppliers. Despite a series of 90-day reprieves, the latest of which came this week, the uncertainty caused by American sanctions has already cost the company a great deal,” Bloomberg reported.
It said that even if Huawei is eventually brought in from the cold, the impact of this summer’s upheaval will be widespread and painful.
“Already, it reported slower sales growth in the second quarter compared to the first as the ban started to bite, especially into a consumer business encompassing smartphones and laptops. That in turn is accelerating Huawei’s effort to become self-reliant.”
Next month, Huawei is expected to unveil the Mate 30 series including its new premium Mate 30 Pro model.
Global smartphone sales to end users by vendor in 2Q19 (Thousands of Units)
Gartner reported that Samsung sold over 75 million smartphones in the second quarter of 2019 and grew its share by 1.1 percentage points year over year.
“Strong demand for Samsung’s new Galaxy A series smartphones and the revamp of its entire entry-level and midrange smartphone range helped this positive performance,” said Gupta. “Demand for Samsung’s flagship Galaxy S10 started to weaken during the quarter, however, indicating that achieving growth in 2019 as a whole will be a challenge.”
Sales of iPhones continued to decline year over year, although at a lesser rate compared with the first quarter of 2019. Apple sold just over 38 million iPhones in the second quarter, a 13.8% decline year over year. “Too few incremental benefits are preventing existing iPhone users from replacing their smartphones,” said Gupta.
“Apple has reached an inflection point marked by shifting its business toward services, which represented 21% of the vendor’s total revenue in the first quarter of 2019.”
Among the top five countries in smartphones sales, China held the No. 1 position with 101 million smartphone sales in the second quarter of 2019, up 0.5% year over year.
With more 5G smartphone models available in the second quarter, vendors in China had to clear out inventory of 4G high-end smartphone models, Gartner said.
Global smartphone sales will remain weak for the rest of the year. Gartner analysts expect that sales of worldwide smartphone sales to end users will total 1.5 billion units in 2019.