Global smartphone shipments finish 2019 with 2.2% decline

The worldwide smartphone market failed to sustain its growth momentum in the fourth quarter, causing shipments for the full year of 2019 to decline by 2.2 percent compared to 2018, according to preliminary research results from IHS Markit technology research, now a part of Informa Tech.

Shipments totaled 1.38 billion units in 2019, down from 1.41 billion in 2018. This decrease was slightly less than the 2.4 percent decline from 2017 to 2018, as reported by the IHS Markit | Technology Smartphone Intelligence Service – Premium.

In the fourth quarter, shipments slipped to 359.2 million units, down 1.5 percent from 364.8 million units in the fourth quarter of 2018.

Samsung reigns supreme again in 2019

Just as in 2018, Samsung ended 2019 as the leader in smartphone shipments. The South Korean company shipped 294.8 million units in 2019, up 1.7 percent from 289.9 million in 2018.

“Samsung’s focus on the mid-range paid dividends in 2019, helping the company to fend off global competition from Huawei, Xiaomi, OPPO and vivo,” said Gerrit Schneemann, senior analyst, smartphones, at IHS Markit | Technology.

Huawei feels trade pressures

Huawei finished 2019 second to Samsung. For the year, Huawei recorded growth of 16.7 percent compared to 2018—reaching 240.6 million units in 2019, up from 206.1 million in 2018.

“Despite achieving double-digit growth for the year, Huawei in the fourth quarter started to feel the impact of continued headwinds from US government trade actions,” said Jusy Hong, smartphone research and analysis director at IHS Markit | Technology. “After three quarters of significant growth in 2019, Huawei’s shipments declined by 7.4 percent year-over-year in the fourth quarter.”

Until the fourth quarter, Huawei had weathered the uncertainties of a US technology ban well, shipping almost 60 million units in the first quarter, followed by 59 million in the second quarter and 66.8 million in the third. While the US government has granted licenses to some US businesses to continue selling products to Huawei, Google is not one of them so far.

“Huawei now is launching its latest flagship smartphones internationally,” said Anna Ahrens, senior analyst at IHS Markit | Technology. “However, in markets like Western Europe, the lack of Google services will make Huawei phones a hard sell for consumers, especially considering that the company’s Mate series is positioned squarely in the premium price segment.”

Growth hard to come by in 2019

Aside from Samsung and Huawei, most of the other major smartphone OEMs ended the year with shipments down compared to 2018.

No.-4 ranked Xiaomi grew 4 percent year-over-year, with shipments rising to 124 million units in 2019, up from 118.7 million in 2018. India remains a critical market for Xiaomi, but the company is facing increasing competitive pressure in the country.

One of Xiaomi’s key competitors in India currently is ninth-ranked Realme. The Realme brand first entered the market in the second quarter of 2018 and was spun out of OPPO in the third quarter of 2019 to focus on the Indian market.

Global shipments of Realme smartphones expanded 275 percent year-over-year, rising to 7.3 million units in the fourth quarter of 2019, up from 1.9 million units during the same period in 2018.

While Realme burst onto the scene as a standalone entity brand in the third quarter of 2019 by shipping more than 10 million units, the company was not able to sustain this aggressive growth in the fourth quarter.

The brands iTel, Tecno and Infinix—all owned by China’s Transsion Holdings— collectively grew by 9.6 percent in 2019, reaching 37.3 million units in 2019, up from 34.4 million in 2018. Individually, however, iTel suffered a decline of 2 percent for the year, shipping 12.4 million units in 2019, compared to 12.7 million units in 2018. Tecno grew by 9 percent, from 14.9 million units to 16.4 million units. Infinix grew by the most of the three brands, with shipments increasing to 8.9 million units, up from 6.7 million in 2018.

“Huawei’s position in the Africa market has been weakened by trade friction, affording a growth opportunity to competitor Transsion,” Schneemann said.

Half of the top-10 grew in the fourth quarter

Looking at quarterly shipments, five out of the top-10 smartphone OEMs expanded in the fourth quarter of 2019 compared to the fourth quarter of 2018. Samsung grew 1% year-over-year, rising to 70.7 million units, up from 70.2 million units. Apple grew 5% to 67.7 million units, up from 64.3 million units. Xiaomi, after being under pressure for much of 2019, had a strong growth quarter with a 36% increase to 32.7 million units, up from 24 million.

Motorola continues to reclaim market share with modest 2% growth year-over-year to reach 10.3 million units in the fourth quarter. This is the first time since the fourth quarter of 2018 that Motorola broke the 10 million-unit-shipment mark. In the fourth quarter, Motorola took the wraps off of its foldable device, the new RAZR. Unlike foldables from Samsung and Huawei, this device uses the foldable screen to make the handset smaller. However, the device has not yet reached consumers and therefore did not contribute to Motorola’s shipments in the fourth quarter.

Lastly, Tecno grew 13% year-over-year in the fourth quarter, to 4.3 million units, up from 3.8 million units—rounding out the top 10 smartphone OEMs.

Shipments outside the top 10 declined from 70.3 million units in the fourth quarter of 2018 to 57.1 million units in the fourth quarter of 2019—a drop of 19%. The overall market declined 1.5% year-over-year during the quarter.

A late surge by Apple

Apple regained its footing in the fourth quarter of 2019, following a couple years of decline. The new iPhone 11 series appears to be resonating with the consumer base. Further growth in the company’s wearables and services segments points to additional new users potentially joining the Apple ecosystem.

Looking ahead

At the beginning of 2020, 5G smartphones are a key trend. While shipments are not large enough to significantly boost the market, the new network technology will bring excitement to a growing number of market segments, presenting more choices to buyers. Major chipset vendors have already announced their reduced-cost 5G system-on-chip devices, allowing the industry to start to make a dent in the high pricing for 5G smartphones.

The tensions between the U.S. government and Huawei will continue to linger and will have an impact on the company and the overall market.

The outbreak of the coronavirus in China is set to affect the smartphone market, with Apple announcing that this challenge is likely going to impact its business. Other OEMs will be faced with similar supply chain challenges as well.

• Jusy Hong
• The author is Research and Analysis Director, Smartphone, IHS Markit, USA.