Multiple data firms are finding smartphone sales have declined to the second half of 2019, but signs point to this trend reversing in 2020.
Global research and advisory firm Gartner has predicted Smartphones sales in Australia will decline with 8.7 million smartphone sales predicted by the end of 2019, compared to the 9.5 million sales in 2018.
Meanwhile, worldwide smartphone sales will decline by 2.5 per cent globally in 2019, year on year, to 1.5 billion units.
According to Annette Zimmermann, research vice president at Gartner, longer smartphone replacement cycles and the ban on Huawei accessing technology from US suppliers were to blame for the weakening demand during the first half of 2019.
“We expect demand to get even weaker in the second half as replacement of high-, low- and mid-end smartphones continues to slow, due to low value benefits,” said Zimmermann.
Global research firm IDC has also noted a decline, recording a drop of 2.3 per cent in worldwide smartphone shipments in the second quarter of 2019, according to its Worldwide Quarterly Mobile Phone Tracker.
According to data from Gartner, the sales decline is expected to impact China’s Huawei in particular, even with the US administration looking to partially reverse the ban on the Chinese smartphone manufacturer.
“The ban on Huawei (even though currently partially lifted) has created negativity around the Huawei brand and is likely to open a few opportunities for other manufacturers in overseas markets such as Western Europe,” Zimmermann said.
“The latter part of the second quarter of 2019 was certainly challenging for Huawei in EMEA and Latin America. However, its leading position in its home market remained unchanged.”
Regardless of the uncertainty around Huawei, Ryan Reith, program vice president with IDC's Worldwide Mobile Device Trackers, said the Chinese smartphone manufacturer managed to hold onto second place for market share.
"When you look at the top of the market – Samsung, Huawei, and Apple – each vendor lost a bit of share from last quarter, and when you look down the list the next three – Xiaomi, OPPO, and vivo – all gained,” Reith said.
“Part of this is related to the timing of product launches, but it is hard not to assume this trend could continue.”
Looking forward, IDC data showed smartphone demand is rising due to mid-tier designs, Anthony Scarsella, research manager with IDC’s Worldwide Quarterly Mobile Phone Tracker, explained.
"A key driver in the second quarter was the availability of vastly improved mid-tier devices that offer premium designs and features while significantly undercutting the ultra-high-end in price,” Scarsella said.
“Combine this with intensified and generous trade-in programs across major markets and channels and upgrading now makes more sense to consumers."
Gartner data indicated that sales will increase in the second half of 2020 due to the rise of 5G connections and 5G-enabled devices.
In Australia, this is expected to translate to nine million smartphones sold by the end of 2020.
“Although leading mobile manufacturers have started positioning their first 5G smartphones (such as the LG V50 ThinQ, OPPO Reno 5G, Samsung Galaxy S10 5G and Xiaomi Mi MIX 3 5G), and CSPs have started to offer some aggressively priced 5G service packages, 5G smartphone sales are set to remain small in 2019,” Zimmermann said.
However, these 5G devices are not expected to dominate the market rapidly, as Gartner data revealed 15 million 5G-enabled smartphones will sell by the end of 2019, representing less than one per cent of all sales in that year.
Further data from IDC revealed Samsung was ranked first for smartphone market share at 22 per cent, with Huawei in second place at 17.6 per cent, then Apple at 10.1 per cent, Xiaomi at 9.7 per cent and OPPO at 8.9 per cent.