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.

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