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Smartphone market continued to struggle in the first quarter of 2019

Following four consecutive quarters of negative growth in 2018, the global smartphone market continued to struggle in the first quarter of 2019, suffering a 6.3 percent year-on-year (YoY) decline in shipments. Smartphone shipments totaled 323.8 million units in the first quarter of 2019, down from 345.6 million during the first quarter of 2018 according to preliminary smartphone data by IHS Markit.

Samsung Electronics maintained the top rank in the smartphone market in terms of volume with shipments of 70.8 million units during the quarter. However, the South Korean company was not the biggest story of the quarter. Instead, the headliner was China’s Huawei, which shipped 59.1 million smartphones in the first quarter. This almost matched Huawei’s strong performance in the fourth quarter of 2018, when the company shipped 60.5 million units. The company’s shipments were up 50 percent YoY, making Huawei one of just three OEMs posting growth during the past quarter. The other OEMs attaining growth in the first quarter were Vivo and Tecno.

After struggling in the fourth quarter of 2018, Apple continued to face challenges in the first quarter of 2019. Apple shipped 43.8 million iPhones in the first quarter, down 16 percent from 52.2 million units during the previous year. Vivo shipped 24.3 million smartphones during the quarter, up from 21.2 million units in the first quarter of 2018. The company’s 14 percent YoY growth was the second-highest shipment increase after Huawei. OPPO, on the other hand, saw shipments decline to 25.2 million units, down 3 percent from 25.9 million units during the first quarter of 2018. Xiaomi remains under pressure from OPPO and Vivo. During the quarter, Xiaomi shipped 24.7 million units, down from 29.3 million units in the first quarter of 2018 – a 16 percent decline YoY. India continues to play a central role for Xiaomi’s business outside of China.

For many other smartphone brands, business conditions continue to be difficult, with few signs of a silver lining on the horizon. LG continues to struggle with its mobile handset business unit. The company’s latest flagship devices lack differentiation, and as a result, they continue to be lost among the sea of new models. Tecno, a popular smartphone brand in Africa, is now facing severe competition from Huawei in the region.

The roll-out of 5G handsets began in the first quarter, but they arrived too late in the quarter to impact results. Furthermore, only a few handsets are currently available to consumers in markets where 5G networks have been launched. The activity surrounding more 5G network launches will continue throughout the year, but first-generation 5G handsets are premium devices, a pricing segment already testing the limits of consumer acceptance.

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