Tarun Pathak, associate director at Counterpoint, attributed the decline in shipments to lengthening replacement cycles in developed markets like the US, China and Western Europe.
"Smartphone OEMs tried to push sales by adding features such as AI, multiple camera assemblies, full-screen displays, in-screen fingerprint scanners etc. but consumers held on to their devices longer due to the absence of groundbreaking innovations and higher prices of devices being offered by the OEMs," he said.
Pathak said in 2019, smartphone OEMs would be looking to use innovative designs and specifications such as 5G, foldable displays, punch-hole cameras, and full-screen in-display fingerprint scanners to lure consumers to upgrade.
Commenting on likely market dynamics in 2019, Counterpoint research analyst Shobhit Srivastava said the combined smartphone shipment growth of emerging markets such as India, Indonesia, Vietnam, Russia and others could not offset the decline in China, which was responsible for almost a third of global shipments in 2018.
"With China showing little or no sign of recovery due to various politico-economic factors, Chinese brands are looking to expand overseas," he said.
"To increase market share, Chinese brands have been aggressive in both hardware/software design and marketing. They are bringing many firsts into smartphone designs and are taking multiple brand strategies to enter new segments without making a compromise of their brand image.”
And Srivastava added: "The increasing competition from both Chinese and global smartphone players will make it tougher for already suffering local brands. We have been talking about consolidation in the smartphone market in the past and 2019 will bring just that — top brands will continue to eat market share of smaller and local players.”
Counterpoint said points of interest in the figures for the full-year 2018 were:
- "The global smartphone market decline saw consumers holding onto their devices longer, especially higher-end phones. Many did not see a need to upgrade as the available phones were too expensive without offering any groundbreaking innovation that would move them to upgrade their older device.
- "For Q4 2018, Huawei, OPPO and vivo continued to dominate with strong performances in China, India, Asia and parts of Europe. The trio have multiple regions to enter and grow moving forward into 2019.
- "Samsung and Apple saw a tough quarter and tough 2018 as demand for their flagship phones have waned due to competition from affordable premium and more cutting-edge phones from Chinese brands such as Huawei and OnePlus.
- "Apple has already attempted to reduce prices in China to alleviate the fall. This will not have a lot of impact on China sales. A small price cut will not move the dial. More effective will be Apple’s buy-back programs and instalment plans which will be rolled out into more countries.
- "Xiaomi reached a record fourth position for the full year after two years of setbacks thanks to immense growth in India. It has surpassed OPPO globally to take back the fourth position.
- "BBK Group (which owns OPPO, Realme, vivo and OnePlus brands) is collectively the world’s third largest manufacturer, even bigger than Huawei in terms of volume.
- "Huawei continues to have its sights on Apple and should surpass Apple as the second largest brand globally in 2019 if it doesn’t face any sanctions from the US in the way ZTE was cut-off from US suppliers (e.g. Google, Qualcomm, US RF components, etc)."