Smartphone makers' focus on making ever-more expensive, ever-more premium devices is putting potential buyers off, Gartner has suggest, after posting "for the first time ever" a slaes slump in the fourth quarter of 2017.
The box counters at Gartner claim that the worldwide market experienced its first-ever quarterly sales dip since it started tracking smartphone sales more than a decade ago.
While full-year smartphone sales increased 27 per cent to 1.5 billion units, the final three months of the year saw OEMs flog 408 million smartphones to customers, down 5.6 percent from the same period a year ago. That marks the first annual decline since Gartner started tracking the smartphone market in 2004.
Gartner claims that this slump in sales comes due to fewer people switching their feature phones for smartphones "due to a lack of quality 'ultra-low-cost' smartphones" and instead are buying nicer feature phones.
Secondly, as phone makers increasingly focus on high-end, expensive mobes, "users are choosing quality models and keeping them longer, lengthening the replacement cycle of smartphones".
In other words, the smartphone market is starting to mature.
"Moreover, while demand for high quality, 4G connectivity and better camera features remained strong, high expectations and few incremental benefits during replacement weakened smartphone sales," said Anshul Gupta, research director at Gartner.
This decline in sales hasn't affected the big names in the industry, indicating that a period of consolidation is looming as lesser players throw in the towel and go off and do something more profitable.
Samsung, which took the number one spot in the fourth quarter of 2017, saw its market share increase slightly from 17.8 per cent to 18.2 per cent, with 74 million handsets flogged to customers.
"Despite the start of a slowdown in sales of Samsung's Galaxy S8 and S8+, the overall success of those models has helped Samsung improve overall average selling price," Gartner noted.
Second-place Apple also saw its share of the market increase, albeit by 0.1 per cent to 17.9 per cent. While iPhone sales actually fell five per cent during the fourth quarter, Gartner notes that the firm's While Apple's market share stabilised in the quarter compared to the same quarter in 2016.
What's more, despite speculation that Apple could be gearing up to bin its flagship iPhone X due to "lacklustre" holiday sales, Gartner notes that "we expect good demand for the iPhone X to likely bring a delayed sales boost for Apple in the first quarter of 2018."
While Samsung and Apple maintained their place in the market during fourth quarter, Gartner claims that Chinese OEMs Huawei and Xiaomi were the "big winners" of the quarter.
Huawei sold more than 43 million handsets to claim 10.8 per cent of the market, up from 9.4 per cent, while Xiaomi - with more than 28 million mobiles flogged - saw its share increase by a whopping 89 per cent from 3.6 per cent to 6.3 per cent.
"Future growth opportunities for Huawei will reside in winning market share in emerging APAC and the US," said Gupta.
"Xiaomi's biggest market outside China is India, where it will continue to see high growth. Increasing sales in Indonesia and other markets in emerging APAC will position Xiaomi as a strong global brand."
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