January 30, 2020 - SHANGHAI, CHINA: Global smartphone shipments grew 1% in Q4 2019, the second consecutive quarter of growth, as the market hit 369 million units. Apple led the market, exploiting strong demand for iPhone 11 models to increase 9% to 78 million units. Samsung shipped 71 million units to maintain its positive momentum, growing 1%. Huawei took third place, but declined 7% amid its ongoing US Entity List saga, as its overseas business offset growth in China. Xiaomi took fourth place, growing 23% to 33 million units, while Oppo took fifth growing 2% to 30 million units.

“This is an industry-wide success - eight of the top ten vendors grew in Q4,” said Canalys Senior Analyst Ben Stanton. “When we saw the first declines in global volume a couple of years ago, Canalys stated that the industry was moving from the growth era to the cyclical era. This is it. This growth spurt will not last forever but will be one of a series of peaks and troughs, as the customer refresh rate for smartphones reaches its new equilibrium point.”

One of the success stories in Q4 came from emerging markets. “Chinese vendors were particularly diligent in developing regions over the past quarter,” said Research Analyst Shengtao Jin. “Smartphones under US$100 have been a major focus, as vendors targeted the installed base of users still using feature phones. Vivo, for example, had exceptional success with the cheap Y91C in Indonesia this quarter. Apple also saw success in emerging regions as the cheaper iPhone 11 tempted a broader base of customers than it is used to.”

In 2019 the worldwide smartphone market fell by 2% to 1.37 billion units, compared to 2018. This was despite global market growth in Q3 and Q4.

“The fortunes of Huawei and Samsung are the story of the year,” said Canalys analyst, Mo Jia. “2018 saw Huawei take huge chunks of Samsung’s market share. And 2019 was meant to be the year Huawei challenged Samsung for the #1 spot. Samsung knew this and was ready for all-out war. It drastically increased its portfolio, and slashed operating margin. But the battle never came, as Huawei’s placement on the US Entity List in May stifled it overseas.”

Ultimately Samsung retained the lead in the 2019 smartphone market with 21.8% share and 298.1 million units, growing 2%. Huawei was second with 17.6%, followed by Apple with 14.5% of the global smartphone market in 2019.

“As Huawei prepares to launch its next wave of devices without Google Mobile Services (GMS), its objectives are now very different. It must maintain as much channel support as it can in key markets like Western Europe. It must curate a developer ecosystem to support HMS. And most importantly, it must maintain scale. If it loses scale, it loses developer interest,” commented Jia.

What is clear going in to 2020 is the smartphone is more important than ever. Declines do not mean people are using smartphones less. In fact, the population is more addicted to phones than ever.

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