Huawei now world No. 2 by mobile market share

According to preliminary data from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, smartphone vendors shipped 342 million units in Q218. This represents a 1.8% drop compared to Q217, a third consecutive quarter of year-over-year declines for the global smartphone market and the fourth quarter of decline in history.

IDC believes this is the result of churn in some highly penetrated markets, although many high growth markets still exist and should return smartphone shipments to overall growth.

The data also shows Huawei in No. 2 position, the first quarter since Q210 where Apple has not been in the top two in terms of market share. Huawei shipped 54.2 million units, giving the brand a record market share of 15.8%.

Samsung, while still in the lead,  may face challenges in the future as indicated on its Q218 earnings call, IDC said. "The continued growth of Huawei is impressive, to say the least, as is its ability to move into markets where, until recently, the brand was largely unknown," said Ryan Reith, Program VP with IDC's Worldwide Mobile Device Trackers.

"It is worth noting that Apple moved into the top position each of the last two holiday quarters following its product refresh, so it's likely we'll see continued movement among the top ranked companies in 2018 and beyond. For most markets, the ultra-high end (US$700+) competition is largely some combination of Apple, Samsung, and Huawei, depending on the geography, and this is unlikely to change much in the short term.

"At the same time, Xiaomi, OPPO, and vivo are all slowly pushing their customer base upstream at a price tier slightly lower than the top three. This is an area they should all watch closely as the builds in this segment are getting increasingly more advanced."

"The combination of market saturation, increased smartphone penetration rates, and climbing average selling prices (ASPs) continue to dampen the growth of the overall market," said Anthony Scarsella, Research Manager with IDC's Worldwide Quarterly Mobile Phone Tracker.

"Consumers remain willing to pay more for premium offerings in numerous markets and they now expect their device to outlast and outperform previous generations of that device which cost considerably less a few years ago. To contest this slowdown, vendors will need to focus on new innovative features and form factors combined with incentives and promotions to drive growth in many of these highly competitive markets moving forward."

IDC said Samsung is still the leader in the worldwide smartphone market despite a 10.4% decline in shipments from last year. The flagship S9/S9+, which launched late in the first quarter, saw slower-than-normal sales according to Samsung. Samsung attributed the slowdown to both intensified competition at the high end and an overall sluggish smartphone market.

The Korean giant will look to bolster sales in the coming weeks with the new Galaxy Note 9, which is expected to launch on August 9. This is earlier in the year than when the Note 8 was launched, as the company hopes to  gain a better foothold against competing launches from Apple and others in the fall (editor's note: roughly Q3 to Q4). The device is expected to feature a bigger battery, new S-Pen capabilities, and increased performance, IDC said.

Huawei surpassed Apple for the first time to move into the second position based on global market share. It continues to lead the China smartphone market with a record market share of 27% in Q218. In the first half of this quarter, Huawei's premium P20/P20 Pro series found strong demand in the US$600-US$800 price segment, helping Huawei build a high profile in the market. In the second half, with the release of its GPU Turbo technology, Huawei continued to earn a good reputation.

"618" promotions - June 18 is the date for a major shopping festival in China - led to strong sales for the company's entry level Honor models in online channels. The Huawei Honor brand continues to be a key driver of growth for the Chinese tech giant, IDC said.

Apple dropped to the third spot for the first time despite its second quarter growth. Apple shipped 41.3 million iPhones, representing growth of 0.7% over the 41 million units shipped last year. The iPhone continued to perform well at the high end as the iPhone X remains a top seller in many markets, IDC said.

Apple could regain control of the market this fall with the expected launch of three next-generation iPhone models. The new models are rumoured to bring different screen sizes, price points, increased performance, and new features to the table when they arrive next quarter.

Xiaomi has pulled ahead of Samsung for the No. 1 position in India over the past few quarters and has now closed the gap with Samsung in Indonesia as it ramped up its local production to address increased demand during the Ramadhan period. The company also expanded its online channel presence and opening up more Mi home stores in the country.

OPPO faced a slowdown in key markets like India and most of Southeast Asia as it eased back on aggressive marketing and sales activities in the region. The company managed to grow 5.1% over the last year as it continued expanding into other markets such as the Middle East and Africa. The recent launch of the Find X has also garnered Oppo some praise with its innovative, bezel-less and notch-less design.

Source: IDC. Top five smartphone companies globally by market share for Q218. Notes:

Data are preliminary and subject to change.

Company shipments are branded device shipments and exclude OEM sales for all vendors.

The "company" represents the current parent company (or holding company) for all brands owned and operated as a subsidiary.