Huawei and Xiaomi are proving the exceptions to a sluggish smartphone market world-wide—much to the expense of
The Chinese vendors accounted for most of the growth during the third quarter, pushing smartphone sales up 1.4% from a year ago to 389 million units, according to market researcher Gartner.
(China: 002502) led the way. Sales of its low-priced smartphones, with enhanced camera features and high-resolution displays, grew 43% to 52.2 million units in the quarter, allowing it to vault past Apple (AAPL) into the No. 2 slot in market share, at 13.4%. Huawei made significant strides in emerging markets in the Middle East, Asia-Pacific, and Africa, according to Gartner.
(Hong Kong: 1810) used much the same blueprint to surge 24%, to 33.2 million units sold, during the quarter. It’s now at 8.5% in market share, in fourth place.
“Chinese vendors are making big moves in developing countries,” Gartner analyst Tuong Nguyen told Barron’s in a phone interview. Their gains, he said, go beyond premium products at affordable prices.
Xiaomi and Huawei posted significant gains while Samsung (South Korea: 005930) and Apple registered slowdown in sales, losing market share in the process.
Samsung’s Q3 smartphone sales slipped 14% to 73.4 million while Apple inched up 0.7% to 45.7 million. Samsung maintained its top spot among vendors globally, with an 18.9% market share. Apple dropped to No. 3, at 11.8%.
“Samsung is finding it harder to further penetrate the U.S. market, especially now given the state of the economy and consumer concerns,” said Nguyen. “Apple is always a high-end play, even with its entry-end models. I see them fighting themselves, looking for the next wave of innovation to make them a compelling buy for consumers.”
Samsung and Apple are banking on new models to lift their holiday sales–usually the strongest for smartphones sales—though several analysts are wary over Apple’s prospects. Meanwhile, new technologies such as foldable phones and super-fast 5G-compatible phones could generate an uptick in world-wide smartphone sales next year and beyond.
Samsung, Huawei, and LG are expected to launch new foldable phones in 2019. Phones equipped with 5G are expected in significant volumes in 2020, when they could reach 65 million units, Gartner said in a statement.
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