Have we reached peak smartphone? Market for new gadgets is ‘effectively in a recession’ sales figures suggest

  • Director at Strategy Analytics says industry struggling as iPhones get pricier
  • Research shows that despite Samsung leading the market, its units fell to 13%
  • Huawai sales soared from 39 million phones sold last year to 51 milllion in 2018

The smartphone market has reached saturation point according to new sales figures that suggest appetite for new gadgets is starting to fall off.

Global smartphone sales figures have fallen by eight per cent in just one year from 393 million units sold in 2017 to 360 million in 2018, according to market research.

Apple came out relatively unscathed in comparison to its competitors, with around 0.50 per cent increase in growth year on year.

Android handsets were a different story, with market leader Samsung among the hardest hit.

The South Korean firm suffered a 13.30 per cent drop over the same period, with Chinese firm OPPO – little known in the west – the only company to perform worse.

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Despite Samsung being the largest vendor, the company was worst hit with units falling 13 per cent between the third quarter in 2017 and the third quarter in 2018 


According to Strategy Analytics the main reasons are:

  • The industry struggling to come to terms with heavily diminished carrier subsidies 
  • Inventory build up in several regions 
  • Lack of innovative and exciting hardware design
  • Customers going back to basics and buying retro non-smartphones such as the new Nokia range
  • People investing in more expensive high-end smartphones and keeping them for longer periods of time, for example what appears to be the case with Apple

According to the latest research by Strategy Analytics, global smartphone shipments were down by 8.4 per cent in the third quarter of 2018 compared to the same time last year.

Linda Sui, the Newton, Massachusetts, firm’s director, said that the global smartphone market is ‘effectively in recession’.

She added that the industry ‘is struggling to come to terms with diminished carrier subsidies, longer replacement rates, inventory buildup in several regions, and a lack of exciting hardware design innovation’.

Apple sales were virtually flat this year – despite a revenue boost of 29 per cent compared to last year. 

That’s because more expensive models are being sold but its overall volume growth has plateaued, experts say. 

Mid market brand Huawei and budget brand Xiaomi bucked the overall trend, however, with a 32.5 per cent and 19.1 per cent increase in growth year on year.

Samsung lost ground to its Chinese rivals, who dominated sales in their home market alongside India, which is one of the few growing markets.

Figures from research firm IDC, based in Framingham, Massachusetts, mirrored the findings of Strategy Analyst.

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Pictured is the Apple XR model. Just last week it was revealed Apple shares plummeted more than six per cent after the firm announced it will stop breaking out exactly how many iPhones it sells in its financial results

According to the latest research by Strategy Analytics, global smartphone shipments were down by 5.6 per cent in the fourth quarter of 2016. This graph shows the year on year growth figures for the top performing manufacturers worldwide

This is not the first time that a slow down of growth has hit the headlines. 

In the fourth quarter of 2017 smartphone sales figures declined by 5.6 per cent with around 408 million sold.

That was the first time growth had reversed since figures were recorded, according to global research company Gartner.

Analyst Anshul Gupta told CNET that this was partly due to the rise in retro phones available that don’t have smartphone features, combined with the lack of quality low-cost smartphones.

The other reason he gave was that people are making bigger investments on high-end smartphones and keeping them for an extended period of time.  

Tech giant Samsung lost sales in their home market to Huawei and Xiaomi who dominated sales in their home market alongside India, which is one of the few growing markets

Figures from research firm IDC, based in Framingham, Massachusetts, mirrored the findings of Strategy Analyst. This graph shows the performance of the top five performing companies over 2017 up to the present in terms of market share

Earlier this month Apple announced it would stop saying how many iPhones it sold in its financial results. 

The stock’s plunge caused Apple to briefly dip below its $1 trillion (£0.77tn) valuation – a historic milestone it reached in August before closing at $207.48 a share, a drop of 6.63 per cent in a day.

The losses hit CEO Tim Cook’s wallet to the tune of more than $11 million (£8.4m) through the 878,425 Apple shares he owns, according to the firm’s latest SEC filing.

A slew of Wall Street analysts lowered their price targets for Apple’s stock on Friday morning, with Bank of America downgrading the shares because it expects ‘increased risk’ from weak iPhone sales in the coming months, among other factors.

Apple shares also dragged down the tech-heavy Nasdaq Composite, which fell more than 1.3 per cent in late morning trading, bringing shares of Facebook, Amazon and Google lower with it.

The California-based technology giant makes most of its money from iPhones and sales numbers have been seen as a bellwether of the company’s fortunes.

Analysts look to the iPhone, iPad and Mac sales figures reported each quarter as a gauge for consumer demand of those products and many view the decision to stop reporting those figures as a red flag.

‘Apple will stop disclosing unit sales figures next quarter, fueling fears the company has something to hide,’ Jefferies analyst Timothy O’Shea wrote in a report to investors.

Apple shares dropped 6.5 per cent to $207.78 (£158.95) in after-market trading on Thursday following the release of earnings figures for a record-setting September quarter.

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