Apple Loses 2nd Place on Smartphone Market

Article By : Dylan McGrath, EE Times

Huawei now accounts for over 13 percent of total smartphone sales

SAN FRANCISCO — Chinese electronics giant Huawei Technologies sold more handsets worldwide than Apple in the second quarter, marking the first quarter since the early days of the original iPhone that Apple hasn’t been among the No. 2 suppliers, according to market research firm Gartner Inc.

Gartner (Stamford, Conn.) said a combination of innovative new handsets from Huawei and a rapid slowdown in demand for the flagship iPhone X enabled Huawei to move into second place in smartphone sales for the first time, relegating Apple to the No. 3 position.

“Demand for the iPhone X has started to slow down much earlier than when other new models were introduced,” said Anshul Gupta, a research director at Gartner, in a press statement.

On Thursday, Apple announced it would host an event Sept. 12 at its campus in Cupertino, Calif., where it is widely expected that the company will introduce its latest flagship iPhone.

Overall, sales of smartphones grew 2% in the second quarter to reach 374 million units, Gartner said.

IDC, a rival research firm, said this week that it expects overall smartphone shipments to decline slightly this year from 1.47 billion last year to 1.46 billion this year, a decrease of less than 1%. However, IDC expects smartphones sales to pick up in the second half of this year and to grow by low single-digit percentages from 2019 through 2022.

IDC smartphone sales forecast 2017-2022

Huawei rose to the No. 2 position in smartphone sales despite being almost completely locked out of the lucrative U.S. market due to security concerns about Huawei handsets that stem from U.S. intelligence agencies, including the FBI, the CIA and the National Security Agency.

Huawei’s second quarter handset sales grew 39% compared to the second quarter of 2017, reaching nearly 50 million units, good for 13.3% market share, according to Gartner. By contrast, iPhones sales increased by less than 1% in the second quarter to reach 44.7 million units, good for 11.9% of the overall market.

“Huawei continues to bring innovative features into its smartphones and expand its smartphone portfolio to cover larger consumer segments,” Gupta, said.

Gupta said Huawei’s into channels, brand building and positioning of its Honor handsets helped drive sales in the second quarter. “Huawei is shipping its Honor smartphones into 70 markets worldwide and is emerging as Huawei’s key growth driver,” he said.

Gartner Q2 2018 smartphone sales data

Meanwhile, Gupta said, Apple faces growing competition from Huawei and other Chinese brands, as well as heightened consumer expectations for phone value, “putting immense pressure on Apple to deliver enhanced value on their premium iPhones to foster growth.”

Samsung Electronics remained the No. 1 smartphone vendor in the second quarter, despite a year-over-year decline in shipments of 12.7%. Samsung shipped 72.2 million handsets in the quarter to secure 19.3% market share, down from 22.6% in the second quarter of 2017, Gartner said.

— Dylan McGrath is the editor-in-chief of EE Times.

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