Gartner reports first-ever drop in smartphone market for Q4

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Smartphone sales decline for first time ever

Samsung's profit and average selling price could improve if its next flagship phones, the successors to its Galaxy series which are expected to launch this year, are successful.

Despite seeing a 3.6 per cent year-on-year decline in units, Samsung still reigned supreme and topped Apple as the top global smartphone vendor.

While Huawei saw sales rise to 43.88 million smartphones in the fourth quarter against 40.80 million a year ago, Xiaomi saw sales nearly double to 28.18 million in the December quarter from 15.75 million in the same quarter a year ago.

Apple's performance in Q4 was also impacted by the fact its over hyped iPhone X arrived late and drove slower upgrades of its other two new smartphones, the iPhone 8 and 8 Plus.

Gartner says that the decline in sales is due to lack of low cost, quality smartphones and the users' preference for buying quality feature phones. Second, replacement smartphone users are choosing quality models and keeping them longer, lengthening the replacement cycle of smartphones.

"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", the analyst added. The South Korean giant now controls about 95% of the OLED market, but that could soon drop with LG Display ramping up production this year, as are Chinese manufacturers like BOE Technology Group and Tianma Micro-electronics. Samsung's market share stayed about flat at 21 percent, while Apple's remained at about 14 percent. Second, component shortages ansd manufacturing capacity constraints preceded a long delivery cycle for the iPhone X, which returned to normal by early December 2017.

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In Gartner's Q4 sales stats, Samsung maintained a narrow lead in global volume shipments of smartphones - but every major (top five) vendor outside of those based in China saw unit shipments slip.

"We expect good demand for the iPhone X to likely bring a delayed sales boost for Apple in the first quarter of 2018". It also says Xiaomi's "competitive" portfolio accelerating its growth in the emerging APAC market and helped it win back lost share in China.

Apple ranked No. 2 in the period with sales down 5 percent to 73.2 million, followed by Chinese vendors Huawei, Oppo and Vivo.

The Chinese manufacturer saw its market share increase from 8.9 percent to 9.8 percent.

Google's Android operating system has captured 86 percent of the market, according to the research firm, which is an increase of 1.1 percent year-on-year.

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