Global smartphone sales drop

With all the news coming out of upcoming new releases, rumours of foldable screens and leaks hinting at various exciting handset designs, you might think we are living in the golden age of the smartphone. However, when you get past the hype and look at the numbers, are we actually buying these new phones in any big way?

According to the latest research from Strategy Analytics, global smartphone shipments fell in the last quarter (Q4) of 2017, and in a big way. In fact, it was the largest drop in shipments that has ever been observed in the history of smartphones, decreasing by nine per cent compared to Q4 2016.

To put it in numerical terms, in the last quarter of 2016 almost 439 million smartphones were shipped around the globe. In Q4 of last year, that number fell to just over 400 million. So are we just not buying phones at the same rate any more, or is there another story hiding under the data?

A major reason for this drop in sales is due to China, where the demand for smartphones dropped by 16 per cent between Q4 2016 and Q4 2017. The Chinese market has always been one of the biggest in the world for mobile phones, so it is no surprise that this had a big impact.

According to Linda Sui, one of Strategy Analytics' directors, this “collapse in the huge China market” was due to a combination of “longer replacement rates, fewer operator subsidies and a general lack of wow models”.

However, despite such a drop at the end of the year, overall 2017 was still a decent period for smartphones. In fact, global shipments actually grew for the year as a whole, with more than 1.5 billion units shipped for the first time in history.

Furthermore, the drop in sales in Q4 is not bad news across the board. In fact, some smartphone manufacturers have a lot of positives to take away from the end of 2017. For example, Apple found itself with a bigger share of the market than Samsung, for the first time in a while.

The California tech giant shipped 77.3 million phones in Q4 2017, which is a small drop compared to Q4 2016's figure of 78.3 million. However, Apple's main rival Samsung saw shipments drop by a larger 3.1 million, down to 74.4 million units.

This means that Apple closed out 2017 with a 19.3 per cent share of the market, while Samsung trailed behind with 18.6 per cent. While this is a big positive for Apple, it is worth bearing in mind that for 2017 as a whole, the company's market share was only 14.3 per cent, while Samsung dominated with 21.1 per cent.

In addition, things aren't looking amazing for Apple in the long-run. Neil Mawston, executive director at Strategy Analytics, pointed out: “Despite robust iPhone X demand and an iPhone average selling price approaching an incredible US$800 (around £567), we note global iPhone volumes have actually declined on an annual basis for 5 of the past 8 quarters.

“If Apple wants to expand shipment volumes in the future, it will need to launch a new wave of cheaper iPhones and start to push down, not up, the pricing curve.”

Elsewhere, Huawei continues to be a solid third-place contender with around ten per cent of the market, both in Q4 and across 2017 as a whole. This is roughly the same as it was a year ago, with Strategy Analytics noting that the company is struggling to break into markets outside of Asia.

No matter what happens, it's clear that 2018 will be an exciting year for smartphone fans. Such a large drop in shipments is bound to shake up the market; who knows, maybe we'll see a reasonably priced iPhone in the next 12 months?

Written by Mazuma

Mazuma Mobile is the UK's most trusted mobile phone recycling service.

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