Smartphone sales growth slowest since 2008, iPhone declines for first time: Gartner

By Digital News Asia February 24, 2016

Q4 2015 sales up 9.7%, 2015 as a whole up 14.4%
Huawei catching up, Android OS continues its dominance

GLOBAL sales of smartphones to end-users totalled 403 million units in the fourth quarter of 2015, a 9.7% increase over the same period in 2014, according to Gartner Inc.

However, this was the slowest growth rate since 2008, and sales of Apple Inc’s iPhone declined for the first time, the research and analyst firm said in a statement.

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Smartphone sales growth slowest since 2008, iPhone declines for first time: Gartner In 2015 as a whole, smartphone sales reached 1.4 billion units, an increase of 14.4% from 2014, Gartner said.

“Low-cost smartphones in emerging markets, and strong demand for premium smartphones, continued to be the driving factors,” said Gartner research director Anshul Gupta (pic).

“Aggressive pricing from local and Chinese brands in the midrange and entry-level segments of emerging markets led to consumers upgrading more quickly to affordable smartphones,” he added.

Anshul said that 85% of users in the emerging Asia Pacific market are replacing their current midrange phone with the same category of phone.

In addition, currency devaluations against the US dollar in many emerging markets are putting further margin pressure on many vendors that import devices.

Current market conditions are prompting some vendors to consider setting up manufacturing operations in India and Indonesia to avoid being hit by future unfavourable currency devaluations and high import taxes.

In the fourth quarter of 2015, Samsung and Huawei were the only two top-five smartphone vendors to increase their sales to end-users (see table below).

Apple suffered its first decline in sales of smartphones – iPhone sales were down 4.4%.

Smartphone sales growth slowest since 2008, iPhone declines for first time: Gartner

Although Samsung was the No 1 vendor, Gartner analysts said the company faces challenges.

“For Samsung to stop falling sales of premium smartphones, it needs to introduce new flagship smartphones that can compete with iPhones and stop the churn to iOS devices,” said Anshul.

With an increase in sales of 53% in the fourth quarter of 2015, Huawei achieved the best performance year-over-year. Its increased brand visibility overseas, and its decision to sell almost only smartphones, gave it a higher average selling price in 2015.

For total sales of smartphones in 2015, Samsung maintained the No 1 position, but its market share declined by 2.2 percentage points (see table below).

In 2015, Apple sold 225.9 million iPhones, to achieve a market share of almost 16%. Huawei’s smartphone sales approached 104 million units, up 53% year-over-year.

In terms of smartphone operating system (OS) market, Android increased 16.6% in the fourth quarter of 2015, to account for 80.7% of the global total.

“Android benefited from continued demand for affordable smartphones and from the slowdown of iOS units in the premium market in the fourth quarter of 2015,” said Roberta Cozza, research director at Gartner.

In the premium segment, despite Apple's slower year-over-year fourth-quarter sales, Apple narrowed the market share gap with Samsung in 2015 as a whole.