Earlier this week, market research company Gartner released a report on the global smartphone market during the second quarter of this year. On balance, the news was not good. The firm noted 368 million handsets were sold in Q2 2019, a decline of 1.6 percent from Q2 2018. As Qualcomm stated in a recent earnings call, consumers aren’t buying new smartphones in anticipation of the forthcoming 5G deployment.
The organization’s report also offered interesting insights into the future of the mobility sector’s leading firms: Samsung, Huawei, and Apple.
Samsung Should Consider Redirecting its Focus to Midrange Devices
According to Gartner, Samsung sold 75.1 million handsets in the second quarter. As such, the corporation’s retained its position as the world’s largest smartphone maker. Moreover, the conglomerate increased its units sold by 4.1 percent from the same frame last year. However, the firm’s sales declined by 5.33 percent from Q1 2019.
The South Korean company’s softening smartphone business contributed to a 55 percent decline in its revenues last quarter. In addition to worldwide market stagnation, the firm’s numbers also suffered because its flagship device, the Galaxy S10, has underperformed. Moreover, significant defects prevent the company from releasing its hotly anticipated Galaxy Fold in Q2.
That said, the company did move a lot of Galaxy A smartphones. Though a midrange series, Galaxy As have resonated with consumers because of their affordable price points, large batteries, high-capacity memory, and bevel-less displays. Accordingly, the conglomerate should devote its resources to developing a midrange 5G device.
With the global recession on the horizon, Samsung would be wise to pivot away from focusing on the luxury market.
Huawei’s Future Lies in China
Gartner reported controversial Sino conglomerate Huawei sold 58 million handsets in Q2 2019. As such, the world’s second-biggest smartphone company bested its year-on-year sales by 18 percent. Despite the U.S. government’s ban on its products in May, the corporation nearly equaled the record-setting 58.4 million units it sold in the first quarter.
The key to Huawei success is its robust domestic business. In Q2, the firm’s Chinese handset sales rose by 31 percent to 37.3 million. The company now commands an impressive 38.2 percent of the Sino smartphone market. While the quality of the corporation’s devices is a major factor in its growth, its record performance has also been driven by patriotism.
Market research company Canalys noted the manufacturer’s retail partners positioned its brand as the patriotic citizen’s choice. Consequently, Washington’s sanctions against the conglomerate only made it more appealing to its domestic consumers.
Although the long-term status of Huawei’s international business is an open question, it’s now on course to become the Apple of China.
Apple’s Big Bet on Services is Paying Off
In the second quarter, the world’s third-largest smartphone manufacturer sold 30 million units, a 15.7 percent year-on-year decline. As such, Apple has experienced double-digit declines in its core business for two consecutive quarters. In Q1 2019, the firm’s iPhone sales fell by 20 percent.
Canalys attributed Apple plugging handset sales in large part to its declining Chinese market share. The firm noted the corporations Sino sales decreased by 14 percent in Q2. The organization will likely see a surge in device sales when the iPhone 11 is released later this year.
However, the ongoing U.S.-China trade war will make its next-generation handsets more expensive for Chinese consumers. Therefore, the company is unlikely to experience a spectacular rebound in its overseas hardware sales.
As it happens, that’s not a mission-critical problem for the Big Tech firm. As previously noted by The Burn-In, Apple is reorienting itself around a services-driven business model. Indeed, in a recent earnings call, CEO Tim Cook said the corporation’s services segment generated $11.5 billion in the last quarter. With its new Apple Card and Apple TV+ streaming platform launching this year, its subscription business will only continue to grow and thrive.