This was the fourth consecutive quarter of year-over-year declines for the global smartphone market, which raises questions about the market's future. IDC maintains its view that the market will return to growth in 2019, but at this stage it is too early to tell what that growth will look like.
While the overall smartphone market has declined for four straight quarters, two things stand out as major factors in the third quarter. Samsung, the largest smartphone vendor in terms of market share, accounting for 20.3% of shipments in 3Q18, declined 13.4% year over year in the quarter. And secondly, China, which is the largest country market for smartphone consumption, accounting for roughly one third of global shipments, was down as well for the sixth consecutive quarter.
Samsung had a challenging quarter with shipments down 13.4% to 72.2 million units shipped. The market share leader continues to feel pressure from all directions, especially with Huawei inching closer to the top after its second consecutive quarter as the number two vendor. In addition, growing markets like India and Indonesia, where Samsung has held leading positions for many years, are being changed by the rapid growth of Chinese brands like Xiaomi, OPPO, and vivo.
Meanwhile, China’s domestic market, which represents roughly one third of all smartphones consumed, has been in decline since the second quarter of 2017, and 3Q18 was the sixth consecutive quarter where the market sees contraction. China was down 11% in the first half of 2018 (1H18), and the challenges continued into 3Q18. Overall IDC expects this decline to decelerate with the market returning to flat growth in 2019.
"China's domestic market continues to be challenged as overall consumer spending around smartphones has been down," said Ryan Reith, program vice president with IDC's Worldwide Mobile Device Trackers. "High penetration levels, mixed with some challenging economic times, has slowed the world's largest smartphone market. Despite this, we believe this market will begin to recover in 2019 and beyond, driven in the short term by a large, built up refresh cycle across all segments, and in the outer years of the forecast supported by 5G migration."
"The race at the top of the market continues to be a heated one as Huawei once again slipped past Apple to the second position," said Anthony Scarsella, research manager with IDC's Worldwide Quarterly Mobile Phone Tracker. "Although Huawei may have beat out Apple in Q3, the holiday quarter could have Apple as the market leader thanks to the launch of three new bezel-less devices. No matter who leads in the overall market the holiday quarter should be an exciting one with a wide selection of new flagship devices available. With the new iPhones, Mate 20, Pixel 3, V40, Note 9, and OnePlus 6T, we can expect consumers will have a plethora of options when upgrade time approaches. The vast selection of high-priced handsets should move ASPs in a positive direction come next quarter."