Global smartphone sales fell for first time in 2018
The global market for smartphones is shrinking, and two of its biggest players are hurting badly.
Apple and Samsung have both warned of slumping sales in the last quarter of 2018. Samsung’s South Korean competitor LG warned of an 80 per cent drop in operating profit in the same period compared to the previous year, according to the CNN.
But the worst may already be over. Industry analysts are predicting a gradual return to growth in 2019.
Sales figures over the past year have made for grim reading.
The industry declined around one per cent in 2018, according to preliminary forecasts by tech consultancies Canalys and Counterpoint Research. That’s the first annual decline for the smartphone market ever.
IDC, another research firm, has forecast that the drop will be as steep as three per cent.
The main drag has come from the world’s biggest smartphone market, China, where sales have been falling for almost two years. Canalys estimates the Chinese market shrunk by nearly nine per cent in 2018 due to a slowing economy, a weaker currency and a long-drawn out trade battle with the United States.
“[In] 2018 the market was so bad that it will be easy for 2019 to be a better year,” said Tom Kang, a research director at Counterpoint. “[The] first half looks gloomy but second half we can expect these things to pan out,” he added.
The recovery will mainly be driven by “feature phone” owners upgrading to better devices, Kang says. Feature phones don’t provide full access to the internet, and Kang predicts many will switch to smartphones in 2019.
Although the Chinese market continues to languish, analysts are predicting a sharper pickup in emerging markets, including India and Africa where collectively more than a billion people still don’t have a smartphone.
“Those markets will continue to grow, to push up the global smartphone market size,” said Mo Jia, an analyst at Canalys, adding that the global market will likely return to “very slim growth in 2019.”
But much still hinges on China and its trade war with the United States, which has already hurt companies on both sides, including Apple, huawei and ZTE.
Analysts still expect the Chinese market will gradually bounce back as the two sides try to hammer out a trade deal. But for now clouds remain on the horizon.