Q4 2018 was the fifth straight quarter of declining smartphone shipments, rising to a 7% reduction in the latest quarter, according to Counterpoint Research’s report. It tagged the year-long decline in 2018 at 4%, dropping from 1.56 billion units shipped in 2017 to 1.49 billion this past year. Other market research firms claimed similar reductions between 4% and 6%.
“Consumers held on to their devices longer due to the absence of groundbreaking innovations and higher prices of devices being offered by the OEMs,” Tarun Pathak, Associate Director at Counterpoint Research, noted in a press release announcing the report.
This was the first year the highest-end devices broke the $999 highwater mark set by the iPhone X in 2017. Flagship phones crept up in price across the board, too.
There are other reasons consumers held on to old phones, like continued security updates and OS upgrades to older devices. But some wounds were self-inflicted: Apple openly noted that its cheap battery replacement program (itself an apology for intentionally slowing older iOS devices) contributed to fewer iPhones sold than anticipated.
And as Pathak said, the smartphone industry didn’t make great innovations in the last year. Manufacturers still tried to push sales with extra features like improved AI, triple-lens cameras (LG V40, Huawei Mate 20), full-screen displays, in-screen fingerprint scanners (OnePlus 6T) and other additions – but none drove sales as a must-have tech development.
Other market research firms offered additional reasons for the downturn in their reports: Strategy Analytics also cited economic headwinds, while IHS noted political effects on sales, like the US-China trade dispute driving a patriotic fervor in the latter country for citizens to buy smartphones from Chinese manufacturers (Huawei, Xiaomi, etc).
Lower smartphone shipments, shifting market share
Aside from noting the reasons behind the shipment decline, the reports (from Counterpoint Research, Strategy Analytics and IHS) cited other changes from 2017 to 2018 - namely, market share.
Samsung remains at the top with 19% of all smartphones shipped across the world, though its 318 million units shipped in 2017 dropped 8% to 291 million. Apple retains second place per these reports with 14% share and 206 million units sold, though third-place Huawei briefly claimed that spot last fall – but the real story is that Huawei rose from 10% market share in 2017 with 153 million units shipped to vie with Apple in 2018 at 14% market share by shipping 205 million units.
Xiaomi at fourth in global market share (8%) upped their units shipped from 96 million to 121 million, a 26% increase. Oppo (120 million shipped) and vivo (102 million shipped) didn’t change their rankings at 8% and 7%, respectively. LG reportedly shipped fewer phones - from 55.9 million in 2017 to 41.2 million in 2018, a 26% reduction. LIkewise, Lenovo dropped from 49.9 million units in 2017 to 38.3 million last year, a 23% decline.
Motorola stayed fairly consistent, shipping 39 million units over 2017’s 38 million. TCL-Alcatel dropped from 21 million phones shipped in 2017 down to 17 million last year, an 18% reduction.
The big surprise at the lower end of the market share pie: HMD Global’s Nokia line shipped 15 million units last year, up from 5 million in 2017.
The rest of the phones shipped saw a trend-reflected 22% drop in units shipped, from 429 million in 2017 to 336 million last year. Thus, the winners this year were those who retained their shipment numbers despite a less friendly consumer base.
So...what about 2019?
As always, it’s impossible to predict what will happen in 2019. But it’s hard to ignore that aforementioned contributing factors to last year’s lower shipments are still going strong - namely, lack of innovation.
TechRadar went to CES and saw some promising phones, but no groundbreaking tech – and we’re including the Royole FlexPai, the first working foldable phone that you’ll have to pay dearly to own. Other manufacturers could prove us wrong on the concept, especially if they’ve developed something actually flat and neat, like Xiaomi’s alleged folding phone.
Other developments coming this year aren’t exactly showstoppers: punch hole cameras and other notch-avoiding schemes, in-screen fingerprint sensors and incremental upgrades on phone specs. 5G is also coming. but there won't be much choice of compatible phones just yet.
Perhaps something exciting will be revealed at MWC 2019 next month. Or perhaps other global developments will make markets more receptive - like a thawing between US and China, though that seems less likely after the US Department of Justice officially charged Huawei on 23 criminal counts.
It's unclear what combination of factors would keep us from talking about 2019 the same way we're talking about 2018: a notable decline that may not be an anomaly.
- Numbers aside, folks are still buying phones - including you. Check out our list of the best smartphones on the market
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David is now a mobile reporter at Cnet. Formerly Mobile Editor, US for TechRadar, he covered phones, tablets, and wearables. He still thinks the iPhone 4 is the best-looking smartphone ever made. He's most interested in technology, gaming and culture – and where they overlap and change our lives. His current beat explores how our on-the-go existence is affected by new gadgets, carrier coverage expansions, and corporate strategy shifts.