Q1 2018 saw smartphone sales return to growth, with a 1.4% increase compared to the previous quarter.
This is according to analyst firm Gartner, who also said that the growth was largely due to mid-tier and entry-level phone sales, which proved more popular than their high-end cousins due to “better-quality models” in those segments.
Gartner said high-end smartphone demand “…continued to suffer due to marginal incremental benefits during upgrade…”, which in layman’s terms means the newest models don’t feel like they’re hugely better than last year’s flagships, and so people aren’t flocking to them.
Speaking as the owner of a Galaxy S8, I’d say this is bang-on. While the S9 is definitely a lovely phone, its new features (like the phenomenal camera Samsung went with) are not worth the price premium for an S8 owner.
Additionally, brands like Huawei and Xiaomi are offering a lot of value in their line-up at for less cash, causing consumers to re-evaluate their smartphone needs as met by the big names in the industry.
Chinese makers the big winners
This is also reflected in Gartner’s report, which said that Huawei and Xiaomi were the biggest Q1 winners. Huawei reportedly achieved an impressive 18.3% growth in Q1 2018, but even this was overshadowed by Xiaomi’s whopping 124% growth in the same period.
Huawei made headlines recently with the launch of its highly impressive P20 flagship handset, which features an AI-enhanced camera that can challenge the best phone cameras from Apple and Samsung, while costing less than those companies’ flagships.
Xiaomi’s success, meanwhile, was attributed to its “…refreshed portfolio of smartphones and aggressive pricing strategy…”, which helped it reach the #4 spot behind Samsung, Apple, and Huawei, and 330% growth in the Emerging Asia/Pacific region.
Samsung remained the top smartphone manufacturer in the world, however that top spot doesn’t come without problems. Gartner says Samsung’s current challenge is in raising “…the average selling price of its smartphones, while facing increasing competition from Chinese brands that are taking more market share”. This, on the back of Samsung’s contracted mid-tier phone unit sales in Q1.
Apple bounces back
Gartner says Apple returned to growth in Q1, with a 4% year-on-year increase in terms of unit sales.
“Even though demand for Apple’s iPhone X exceeded that of iPhone 8 and iPhone 8 Plus, the vendor struggled to drive significant smartphone replacements, which led to slower-than-expected growth in the first quarter of 2018,” said Mr Anshul Gupta, research director at Gartner.
“With its exclusive focus on premium smartphones, Apple needs to significantly raise the overall experience of its next-generation iPhones to trigger replacements and lead to solid growth in the near future.”
With so much value coming from mid-range and entry-level smartphones from Chinese manufacturers, and the challenge of making flagship phones feel like significant upgrades over their forebears, the coming months in the smartphone space will be very interesting indeed.
Tarsus Distribution carries a selection of Samsung phones that are available to its partner base, including the Galaxy S9/S9+, the Galaxy Note 8 6.3-inch, and the Galaxy J1 Ace Neo.
For more information on these phones, contact Samsung Product Manager Charl van den Berg by email, or give him a call on 011 531 1000.