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smartphone market

Smartphone Market Decline Halts, Will 5G Help it Grow?

The global smartphone market showed signs of recovery ending a long period of continuous quarterly YoY declines. Shipments during 3Q 2019 were flat at 380 million units. The two markets that helped halt the slide are India, which has been growing steadily, and China, now showing a slower decline.

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Both countries saw healthy channel builds, in India, OEMs prepared early for Diwali and online sales. In China, Huawei, Oppo and Vivo enjoyed healthy demand ahead of the National Day Golden Week holiday in October.

The upcoming holiday season should drive smartphone demand into growth for the second half of the year.

Smartphone market Highlights:

  • Samsung continued its growth thanks to strong sales of the Galaxy Note 10 and Galaxy A series. The improved product-mix helped it post better profits.
  • Huawei grew a healthy 28.5% YoY globally. It captured a record 40% market share in China. It rebounded in Europe after the decline mid-year caused by the US trade ban. As it continues its aggressive push, there’s an increased need for careful inventory management in China and Europe in Q4 2019.
  • Apple iPhone shipments were down 4% YoY. However, initial uptake for the iPhone 11 series was robust. In the US, pre-orders and the first week of sales, saw more demand for the iPhone 11 Pro Max and iPhone 11 Pro, but the standard iPhone 11 rose quickly into the best-seller’s list.
  • Apple’s price corrections in China and elsewhere with iPhone 11 and iPhone XR stimulated demand during the last week of September.
  • Realme was the fastest-growing brand for the second successive quarter, capturing 7th place globally. Strong performances in India and Indonesia drove its growth.

Counterpoint Research believes the key OEMs with the largest installed bases, especially in developed regions, will rely on 5G as a key point of differentiation and will encourage their users to upgrade. Already, 5G rollouts have been faster than 4G was in its first few months, with 15 commercially available 5G devices and many more lined-up for launch in the last few months of 2019.

Nevertheless, 5G smartphones only accounted for 2% of shipments in Q3 2019 and will contribute relatively little to the overall market for the full year 2019. But, 2020 will likely be a breakout year for 5G smartphone adoption, rekindling smartphone demand.

 

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