Apple Shines, but Business Is Still Dreary in Smartphones

Apple Shines, but Business Is Still Dreary in Smartphones

According to a report by market research firm IDC, smartphone vendors shipped a total of 334.3 million units during the first quarter of 2018 (1Q18), resulting in a 2.9% decline when compared to the 344.4 million units shipped in the first quarter of 2017.

Smartphone shipments from Oppo and Vivo, on the other hand, declined for the second consecutive quarter, although both companies delivered double-digit growth until the third quarter of 2017.

Confirming what Apple Inc.'s (NASDAQ: AAPL) earnings showed, the company is picking up global market share in the smartphone industry.

"The average selling price (ASP) of smartphones is increasing, too, in emerging markets with users upgrading from entry level to the mid smartphone segment", Pathak noted. "Hence, we expect OEMs to accelerate their go to market strategy and expansion in parts of Africa and rest of the APAC region to capture the growing demand in CY 2018".

"The saturating China smartphone market is forcing the Chinese smartphone players to invest and expand beyond their home market", said Counterpoint research analyst Shobhit Srivastava. Outside of the flagship, the A series and J series drove most of the volume in developed and emerging markets. Huawei has managed to significantly increase its presence across the big five European markets and it now holds nearly a fifth of sales in the three months to March 2018 - 19.0%, up from 14.4% a year earlier.

For Xiaomi, the Q1 2018 brings some good news as the brand due to its strong growth of 87.8 percent year-over-year.

Apple's first quarter saw the iPhone maker ship 52.2 million iPhones, representing a modest 2.8 per cent year-over-year increase from the 50.8 million units shipped last year.

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Meanwhile, iOS share has held steady across the big five markets in Europe, the US and Australia, in contrast to continuing growth in urban China. Last year, however, the trends were different and the overall growth of the Chinese brands like Oppo and Vivo was stunted. Xiaomi has managed to take the fourth spot, courtesy its strong growth outside China.

Lenovo (including Motorola) was hit by a 24% YoY decline in the first quarter and holds a market share of 2.4%.

Top 10 brands accounted for 76 percent of the smartphone volumes in Q1 2018.

LG registered 11.4 million smartphone shipments in Q1 2018.

For brands like Gionee, Meizu, TCL and Lenovo, a rebound seems hard at this time. The Lenovo brand declined in India and in rest of APAC, while Motorola continued to do well in LATAM and United States smartphone markets.

"Oppo and Vivo have established strong brands in China, where they are able to sell both mid-range and high-end smartphone models", said Jusy Hong, director, mobile devices, at IHS Markit.

iTel entered the top 10 smartphone brand list for the first time. In these markets, the Lite versions continue to be the company's bestselling devices, but the P10 and the Mate 10 range are in a much better position compared to predecessors P9 and Mate 9.