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Huawei takes second place in global smartphone market

IDC Q2 figures show Apple knocked out of top two smartphone sellers for first time since 2010

Huawei takes second place in global smartphone market
Huawei has taken the number two slot in smartphone sales off the back of strong growth in most markets apart from the US.

Huawei pushed into second place in the global smartphone market in Q2, according to preliminary figures from IDC.

The Chinese IT company pushed Apple down into third place, marking the first time in eight years that Apple didn't hold the number one or two slot in IDC's rankings.

Huawei showed a 40% growth from the same quarter last year, with strong growth in China, Asia-Pacific and EMEA regions. Samsung retained the lead in global smartphone shipments, despite a 10.4% decline in numbers from last year.

Overall the market dropped by 1.8% in Q2, down to 342 million units, the third consecutive quarter of year-over-year declines for the global smartphone market and only the fourth quarter of decline in history. IDC attributed this result to churn in some highly penetrated markets, although many high growth markets still exist and should return smartphone shipments to overall growth.

Huawei shipped 54.2 million phones in Q2, against 71.5 million units for Samsung and 41.3 million for Apple. IDC said that warnings from Samsung's recent 2Q18 earnings call suggest its mobile division revenues will face challenges moving forward.

"The continued growth of Huawei is impressive, to say the least, as is its ability to move into markets where, until recently, the brand was largely unknown," said Ryan Reith, program vice president with IDC's Worldwide Mobile Device Trackers. "It is worth noting that Apple moved into the top position each of the last two holiday quarters following its product refresh, so it's likely we'll see continued movement among the top ranked companies in 2018 and beyond. For most markets, the ultra-high end ($700+) competition is largely some combination of Apple, Samsung, and Huawei, depending on the geography, and this is unlikely to change much in the short term. At the same time, Xiaomi, OPPO, and vivo are all slowly pushing their customer base upstream at a price tier slightly lower than the top three. This is an area they should all watch closely as the builds in this segment are getting increasingly more advanced."

Analyst company IHS Markit noted that Huawei is shifting to more value-added models, by launching new flagship smartphones with the latest features. Huawei's P20 Pro is the first flagship smartphone model to be equipped with triple cameras, beating competitors to market. Increasing brand recognition in Europe and Asia is enabling the company to challenge Samsung in many price segments.

Samsung maintained the lead of the market, despite its S9/S9+, which launched late in the first quarter, showing slower than normal sales according to Samsung. The upcoming Galaxy Note 9 is expected to gain an early lead for the Autumn sales period. Apple is also expected to launch three new models in Q3, to resume its challenge.

Fourth in IDC's market analysis is Xiaomi, which has pulled ahead of Samsung for the number 1 position in India over the past few quarters and has now closed the gap with Samsung in Indonesia as it ramped up its local production to address the increased demand during Ramadhan period, while also expanding its online channel presence and opening up more Mi home stores in the country.

OPPO faced a slowdown in key markets like India and most of Southeast Asia as it eased back on its aggressive marketing and sales activities in the region. Despite this, the company still managed to grow 5.1% over last year as it continued its expansion into other markets such as the Middle East & Africa. The recent launch of the Find X has also garnered Oppo some praise as the innovative, bezel-less and notch-less design has grabbed the attention of many.

"The combination of market saturation, increased smartphone penetration rates, and climbing ASPs continue to dampen the growth of the overall market," said Anthony Scarsella, research manager with IDC's Worldwide Quarterly Mobile Phone Tracker. "Consumers remain willing to pay more for premium offerings in numerous markets and they now expect their device to outlast and outperform previous generations of that device which cost considerably less a few years ago. To contest this slowdown, vendors will need to focus on new innovative features and form factors combined with incentives and promotions to drive growth in many of these highly competitive markets moving forward."

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