Global Smartphone Recession Confirms Consumer Downturn -

Global Smartphone Recession Confirms Consumer Downturn

Nov 11, 2018Jeremy ParkinsonFinance0

Q3 smartphone sales data show the global market in recession, as Strategy Analytics confirmed:

“The global smartphone market has now declined for four consecutive quarters and is effectively in a recession.”

The warning signs began in Q1, when the market plateaued for the first time, as discussed here in May:

“The global smartphone market has finally gone ex-growth as China’s slowdown continues. In turn, the market is starting to polarise – with Apple pushing further up-market whilst Chinese brands such as Xiaomi focus on volume. Samsung’s middle market positioning looks increasingly under threat.”

The chart highlights the key issues:

Samsung’s market share has declined from a third in 2013 to a fifth today, as its mid-market positioning leaves it without a clear value proposition for consumers

China’s Top 3 players have meanwhile soared from just a 12% market share to 29% today, powered by their low-cost positioning

Apple’s market share has remained very stable, as it has focused on the top end of the market, prioritising price over volume

“Others”, also usually without a clear value proposition, have seen their share drop to just 36% from 46% in Q3 2016

China remains the world’s largest smartphone market, with 103 million phones sold in Q3. But its volume was down 8% compared to Q3 2017, as the stimulus programmes continue to slow. As the Counterpoint chart shows, the market is now consolidating around a few winners:

Huawei are emerging as the market leader with a 23% share

Vivo and Oppo remain key challengers at 21%

But “Others” have dropped to 13%, and Samsung has almost disappeared at just 1%

As Counterpoint note, the top 5 brands now hold 86% of the market:

“The Chinese smartphone market is saturated with accelerated market consolidation. The competition in 2018 is almost a zero-sum game for the top five players. It is challenging however, even for the leading brands to create clear product differentiation. In Q3, only Huawei and vivo managed to achieve positive YoY growth among the top 5 brands.”