Midtier devices drive more sales globally, and Huawei sales increased by 26%, with the strongest growth in the top five suppliers.
5G and foldable phones: the promises and problems
Sales of smartphones continued to fall globally in the third quarter of this year, according to Gartner, by 0.4% compared to the same period last year.
This was the third consecutive quarter of decline for smartphone sales but the smallest decline of the year, with a 1.7% decrease in the second quarter of 2019 and a decrease of 2.7% in the first quarter of 2019, according to Gartner.
One of the problems that caused the sales decline is a lack of value on smartphones. Consumers no longer buy the cheapest smartphone or the most expensive smartphone. Instead, they opt for medium-sized smartphones that offer more value, according to Anshul Gupta, senior research director at Gartner.
Gartner defines a medium-sized smartphone as a phone that sells, on average, around $350.
Another factor that causes consumers to wait before they buy a new phone is that they are waiting for 5G coverage in more countries, Gupta said.
Expected revenue in 2020
Turnover, which was delayed in 2019, will pick up next year. “We expect that 2020 will be a year of growth,” Gupta said.
However, consumers will still buy medium-sized phones until 2020. “Mid-tier smartphones will continue to be the key to drive growth in market segments worldwide, so in emerging markets because of the aspirations to own the best possible smartphone,” Gupta said.
The senior chief research analyst, Tuong Nguyen, agreed that the trend toward mid-range telephones would continue until 2020.
“While high-tier phones continue to have the latest and greatest hardware and features, the smartphone market has reached a point where the improvements achieved with the latest high-end device are marginal and often excessive for the average user,” Nguyen said.
“I think of it as having ‘too much’ and then adding more to it. Sometimes I think of it as fast food analogies. You need a hamburger pie to make a hamburger. A double pie would make it better. But otherwise, it’s excessive for “most” people, “he added.
To encourage consumers to buy premium phones again, Nguyen said: “These devices should offer something that will change the experience considerably. We have yet to determine what that is, but we saw a similar shift from non-smartphones to smartphones. It went from a device for mainly voice calls and some text to a mini-computer in your pocket. ”
Gupta said that “a faster pace of innovation and the next generation UX will be crucial” to interest consumers in buying premium smartphones again.
What the shift in purchasing decisions means for manufacturers
Brands such as Samsung, Huawei, Xiaomi, OPPO, and Vivo have been able to improve their entry and middle portfolios due to this shift in purchasing decisions, and Huawei, Samsung, and OPPO grew in the third quarter of 2019. For comparison: Apple has seen a double decrease in sales compared to a year earlier.
Huawei recorded double-digit sales growth despite the slowing smartphone market and was only one of the five largest smartphone suppliers worldwide, with double-digit growth in smartphone sales in the third quarter of 2019.
Huawei sold 65.8 million smartphones, an increase of 26% compared to the same period in 2018. Performance in China is the main driver of its growth, with 40.5 million smartphone sales there. The ban on Huawei gaining access to important US technology has yet to be fully implemented. Still, according to the Gartner release, the proposed ban brought negativity to the brand on the international market.
“The current situation with the US has also fostered patriotism among Huawei’s partners who now want to promote their smartphones in China – a development that makes it difficult for local competitors to compete aggressively against Huawei. Huawei’s long investment in sub-brands ( Honor and Nova), in multi-channel operations (online and retail), and 5G and other technological innovation forms the basis of its success in China, “according to the Gartner release.
Sales on Black Friday and Cyber Monday
Black Friday and Cyber Monday can boost smartphone sales and consumer demand in the fourth quarter of 2019. Google and Samsung will likely offer aggressive prices for older and newer devices, including the Google Pixel 4 and the Samsung Galaxy Note 10.
“Competition between mobile phone manufacturers will increasingly focus on smarter smartphones,” said Roberta Cozza, senior research director at Gartner, in the release.
“These devices will increasingly deliver personalized content and services based on the context and preferences of users,” said Cozza. To provide relevant, personalized experiences, manufacturers must improve the integration of artificial intelligence (AI) into smartphones and create security features and privacy-critical aspects of their brands. “
