2018 was a difficult year for the big smartphone makers. Worldwide sales are falling. Their losses make up for the manufacturers with higher prices. And this strategy has a future, say analysts.
Almost everyone owns a smartphone these days. For the industry, this is increasingly becoming a problem: After years of boom, saturation slowly sets in; sales figures are falling. If you believe the smartphone experts of the market analysis company International Data Corporation (IDC), 2018 was in this respect even the “worst year” for smartphone manufacturers and sellers.
Overall, last year’s IDC data showed that “only” 1.4 billion devices were shipped, down 4.1 percent from 2017. “The smartphone market is in turmoil around the world,” the vice-director said. Program Director Ryan Reith.
But can you really talk about a crisis in the smartphone market? A closer look reveals that there are winners and losers.
The premium business is booming
In fact, growth in the industry as a whole slowed significantly, as confirmed by a market analysis by Counterpoint Research. The smartphone market had even shrunk in 2018 by a few percentage points. The revenue is bubbling anyway. The reason: Consumers spend more money on a new device. Especially with the devices of the middle and upper price range (starting from 400 dollar) a clear growth is to be noted, shows the report. This market has increased by 18 percent.
The analysts attributed this, among other things, to the pricing policy of Apple . Since the introduction of the iPhone X , the smartphone prices have “jumped to a new level”. The device blew up the psychological price limit of 1,000 euros for the first time. Other manufacturers soon followed suit. All the flagships introduced last year, whether the iPhone XS, the Samsung Galaxy Note 9 or the Google Pixel 3, cost at least $ 800 to launch. Experts expect this trend to continue.
Manufacturers need to rethink their strategy
The manufacturers test out the pain threshold of the buyers – and are even successful. According to the analysts, consumers are quite willing to spend more money on a new smartphone. However, they also keep these devices longer and have correspondingly higher demands.
For the industry this means that it also has to think long-term. New features can be delivered via a software update. For this, however, the devices must bring more power from the outset. Future-proof hardware equipment becomes mandatory. A long-term guarantee for regular safety updates is also required by the buyers.
Competitors from China increase the pressure
According to the market analysis of Counterpoint Research, the biggest winners of 2018 are the Chinese manufacturers Huawei , OnePlus and Xiaomi . Huawei scored in the past year, especially in the premium segment. Models like the Huawei P20 (Pro) or the Mate 20 (Pro) also found many fans in Germany and Europe. OnePlus and Xiaomi in turn are considered champions in terms of value for money. In the middle class ($ 400 to $ 600), OnePlus was the strongest of all brands.
The IDC analysts also noticed these market shifts. While the established brands lost customers, the formerly small competitors such as Huawei and Xiaomi were able to grow significantly. Both manufacturers increased their sales by more than 30 percent. The market leader Samsung, however, sold significantly fewer devices (minus eight percent) than in 2017. Also at Apple, a lousy Christmas business and a trade war with the US is reflected in the numbers (- 3.2%).
According to Counterpoint Research, Apple still secures the lion’s share (51%) of the market for high-end smartphones with the iPhone . But Samsung and Huawei are slowly increasing the pressure. The Chinese group even managed to double its market share in the premium segment from 2017 to 2018. This year, Huawei wants to replace its biggest competitor Samsung at the top of the Android market.