A seismic change is accelerating in the global smartphone market as Huawei of China has overtaken Apple to become the world’s second largest smartphone producer.
Samsung Electronics maintained its position as the number one player by selling 78 million cellphones in the first quarter. Apple suffered a double-digit drop in iPhone sales, while Huawei solidified its position as the number two player by widening its gap with Apple to more than 15 million units.
Samsung Electronics’s IM Business Division in charge of the mobile phone business posted 27.2 trillion won in sales in the first quarter. Samsung’s sales fell 4 percent compared to the first quarter of last year, but the drop was smaller than Apple’s 17 percent decrease. Thanks to the popularity of the strategic Galaxy S10 series, Samsung Electronics’ sales rebounded to 78 million phones in the first quarter. Its smartphone sales swelled to 71 million units from 69 million units in the previous quarter, recovering the 70 million unit level.
Samsung Electronics plans to boost its market share by launching the Galaxy Fold whose launch was delayed due to screen defects and the Galaxy S10 5G in the United States on May 16.
China’s Huawei said in its earnings announcement on April 22 that it shipped 59 million smartphones in the first quarter, a 50 percent increase from 39 million units recorded in the same period of last year. Huawei has disclosed its goal of overtaking Samsung by the end of next year.
Apple’s sales, on the other hand, continued to shrank. IPhone sales totaled US$31 billion in the first quarter, down 17.3 percent from a year ago, the company said in its first quarter earnings announcement on April 30 (local time). The figure is the sharpest quarterly decline in sales, larger than the 11.8 percent fall in the fourth quarter of last year, which was the worst performance since the first quarter of 2016. Although Apple did not disclose the number of iPhone units sold, smartphone market experts speculate that Apple sold less than 45 million units in the first quarter of this year, considering the fact that Apple posted US$38 billion in sales by selling 55.22 million units in the first quarter of last year.
The iPhone’s poor sales performance is blamed on the lengthened smartphone replacement cycle and the rise of local companies in the Chinese market. Apple's first quarter sales in China stood at US$10.2 billion, down 21 percent year on year. Tim Cook, CEO of Apple, said that he expects Apple sales to recover in China thanks to improved U.S.-China trade relations. But it is unclear whether Apple will be able to make a turnaround as Chinese companies are poised to strike back. In addition, as Apple’s plan to receive modem chips for 5G phones from Intel hit a snag, the iPhone for 5G services is expected to come out next year.
Market researchers have released reports on smartphone market shares in the first quarter. According to Strategic Analytics, Samsung Electronics sold 71.8 million units (a 21.7 percent market share) while Huawei and Apple sold 59.1 million units (17.9 percent) and 43.1 million units (13 percent), respectively. In the first quarter of 2018, Apple came in second while Huawei third. World smartphone shipments n the first quarter of 2019 were tallied at 330 million units, down 4 percent from the same period of last year. Strategic Analytics estimated Xiaomi’s and Oppo’s sales at 27.5 million units and 25.4 million units, respectively.
On the same day, IDC also reported that iPhone sales fell 30 percent in the first quarter, ranking third to Samsung and Huawei. IDC estimates that Samsung Electronics sold 71.9 million units, Huawei 59.1 million units, Apple 36.4 million units, Xiaomi 25.0 million units, Vivo 23.2 million units, Oppo 23.1 million units, and other smartphone makers 72.1 million units. The total sales volume hit 310.8 million units. The market shares of the top four companies were 23.1 percent for Samsung, 19 percent for Huawei, 11.7 percent for Apple and 8.0 percent for Xiaomi. Their market shares in the first quarter of last year were 23.5 percent, 11.8 percent, 15.7 percent and 8.4 percent, respectively.
Smartphone market experts predict that Huawei will continue to grow based on strong demand in China. Especially, as Apple is expected to release the 5G iPhone next year, Samsung Electronics and Huawei will seek to preempt the 5G phone and foldable phone market in the second half of this year.