Brief:

• Smartphone shipments fell an estimated 4.1% to 1.4 billion in 2018, the "worst year ever" for the market, researcher International Data Corporation (IDC) announced. Shipments fell for the fifth straight quarter in Q4 2018 with a 4.9% drop from the prior year to 375.4 million units. Challenging market conditions mean the market may shrink again this year, IDC forecasts.
• Despite the global decline in smartphone sales, the top five makers of handsets — Samsung, Apple, Huawei, Oppo and Xiaomi — boosted their share of the market to 69% of smartphone volume in 2018 from 63% a year earlier. When Vivo is included, which currently sits at number six and has been in and out of the top five in recent quarters, the share of the top companies is 75% and growing.
• Top brands Samsung and Apple saw smartphone volumes decline 5.5% and 11.5% in Q4, respectively. In China, the two brands were crowded out by Huawei, Oppo, Vivo and Xiaomi, which grew their total share of the China market to roughly 78% in 2018 from 66% a year earlier.

Insight:

IDC's estimates of smartphone shipments confirms other reports of shrinking smartphone sales as mobile users hold onto their devices for longer and China struggles with its slowest economic growth since 1990. China's trade fight with the United States gets much of the media attention, but the slowdown can mostly be attributed to Chinese President Xi Jinping's three-year effort to discourage borrowing among debt-laden local governments, businesses and consumers. The country's leaders are working to boost growth this year, which may lead the smartphone market path to recovery.

Apple and Samsung Electronics, the world's two biggest makers of smartphones, this week reported dismal results for the final three months of 2018, including the key holiday shopping season. Both companies cited slowing sales in China for their reduced sales and earnings. Apple's sales in Greater China, which includes Hong Kong and Taiwan, plunged 27% to $13.17 billion as the iPhone maker lost out to less expensive Chinese brands like Huawei, Vivo and Oppo.

Apple needs to revamp its strategy in China to appeal to customers who are seeking lower-priced smartphones with features such as dual-SIM cards, a popular feature in China that lets people have a second phone number. About 93% of smartphones sold in China offer this, but Apple didn't add the feature to iPhone models until September, The Wall Street Journal reported.

Huawei's smartphone shipments jumped 33.6% to 206 million, giving the Chinese company a 14.7% market share and making it the third-biggest smartphone producer in the world behind Samsung and Apple, IDC estimated. Samsung's shipments fell 8% to 292.3 million in 2018 and its market share dipped to 20.8% from 21.7% a year earlier. Apple's iPhone shipments slipped 3.2% to 208.8 million, and its market share held steady at just under 15%, per IDC.