Smartphone shipments worldwide flattened out in the first quarter with just 0.2pc growth year-on-year, the smallest growth on record. Its market share declined marginally to 23.6 percent from the 24 percent it held in the same period last year, while Apple's share was down to 15.3 percent from 17.7 percent a year earlier. Both lost ground to fast-growing Chinese smartphone makers including Huawei, Oppo and Vivo.
Apple's South Korean rival Samsung shipped 79 million smartphones worldwide in the first quarter, down 4 percent annually from 82.7 million units in the first quarter of 2015, Strategy Analytics said. The company recently released its flagship P9 smartphone and told CNBC in February that it will surpass Apple as the second-biggest smartphone player in the world in three years and leapfrog Samsung by 2021.
The company's new Galaxy S7 and S7 edge sold "vigorously" in the month of March, while its more affordable J-series phones did well in emerging markets, according to IDC.
The launch of the iPhone SE which has all the power of the 6S in a compact form factor could help but at $399 the SE features equally powerful competition from competitors in India and China. As Apple CEO Cook mentioned on the company's earnings call, the SE will begin having an impact on iPhone shipments in the second quarter of 2016.
So what does all of this mean for the smartphone market?
The drop in revenue for mainland China reached 11%. It blames the contracting market on "increased penetration maturity" in major markets such as China, along with general consumer caution about the future of the global economy.
The biggest reason why Lenovo and Xiaomi are getting hurt is because numbers suggest the average selling price of a smartphone in China has gone up from $207 in 2013 to $257 in 2015, indicating greater purchasing power and an appetite for more premium smartphones. Xiaomi remains under pressure from Oppo, Vivo and others across Asia, while it is still very weak in North America and Western Europe, Strategy Analytics said. "These new vendors would be well-advised not to rest on their laurels though, as this dynamic smartphone landscape has shown to even cult brands like Xiaomi that customer loyalty is hard to consistently maintain".
"As the market as a whole slows, smartphone vendors need to adjust to targeting the replacement market", Jupiter said in a statement.
On Wednesday, research firm IDC said that smartphone makers managed to eke out a tiny gain in Q1. This increase is due to the Huawei-made Nexus 6P- Google's flagship device. While Huawei is furthest along in terms of global recognition, selling equally impressive volumes outside of China remains a challenge for many of these brands, whether it is Xiaomi, Lenovo, OPPO, or Vivo.
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Source: Party ends for smartphones as global sales fall
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