EnterpriseChannel Asia - APAC drives global rise in smartphone sales – but challenges are on horizon

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APAC drives global rise in smartphone sales – but challenges are on horizon

New findings from Gartner have revealed global sales of smartphones to end users continues to rise, spurred on by demand for 4G smartphones in emerging markets.

Global sales of smartphones to end users totaled 366.2 million units in the second quarter of 2017, a 6.7 percent increase over the second quarter of 2016

When it comes to operating systems, Android strengthened its hold on the market with 87.7 percent market share, with iOS accounting for 12.1 percent.

"Although demand for utility smartphones remains strong, there is growing demand in emerging markets for 4G smartphones, with more storage, better processors and more advanced cameras. This is translating into higher demand for mid-priced [US$150 to $200] smartphones," says Anshul Gupta, research director at Gartner.

The market was encouraging in that sales of all types of smartphones grew in the second quarter of this year when compared to the second quarter of 2016.

Despite this, there is a concern about the rising component costs associated with smartphones, as well as limited supply due to the reduced availability of critical components.

"We expect a shortage of flash memory and OLED [organic light-emitting diode] displays will affect premium smartphone supply in the second half of 2017," says Gupta.

"We've already seen Huawei's P10 suffer from a flash memory shortage, and smaller, traditional brands, such as HTC, LG and Sony, are stuck between aggressive Chinese brands and the dominating market shares of Samsung and Apple in the premium smartphone segment."

Bouncing back from its fiery phones and consequently three consecutive quarterly declines, Samsung’s smartphone sales grew 7.5 percent year-over-year with the Galaxy S8 and S8+ bringing back high demand.

"Despite growing competition from Chinese brands such as Huawei, Oppo and Vivo, we expect Samsung to register growth in 2017," says Gupta.

Apple managed to clear the distribution channel of iPhone inventory amounting to 3.3 million units during the second quarter, but despite this, sales were flat (down 0.2 percent), year over year.

"Apple's sales in emerging markets are expected to grow as older-generation iPhones continue to attract buyers. The new iOS 11, which will include augmented reality, machine learning, an improved Siri and a new display design, will likely fuel strong iPhone sales in the fourth quarter of 2017, and help Apple increase its sales in 2017," adds Gupta.

In terms of the vendors who achieved the best performances in the second quarter, Vivo and Oppo came out on top with year-over-year sales increases of 70.8 percent and 44.1 percent, respectively.

Greater China and emerging Asia/Pacific markets drove the global sales of smartphones in the second quarter of 2017, with market shares of (27.7 percent) and (21.4 percent), respectively, accounting for nearly half of all sales.

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