According to market research company Strategy Analytics, in January-March 2016 were sold 334,6 million smartphones — which is 3% less than revenue of 345 million recorded for the same period last year. In year-on-year smartphone market declined for the first time since 1996, when Strategy Analytics had started a count of sales of advanced mobile communications, says the company, which is quoted by The Financial Times.
This is largely due to the early saturation of the world’s largest smartphone market — China, and increasing concern of consumers around the world about the state of the global economy.
The drop in sales recorded in almost all the major players in the market, but explains it differently. The leader among manufacturers of smartphones, Korean Samsung Corporation, sold in the first quarter of this year, 81.9 million units, 1.7% less than in the same period last year, to 82.4 million mobile devices. However it almost has not changed its share of the global market — a decline of 0.1% from 24.6%. Samsung has released quarterly figures on Thursday: in January—March of current year the company grew revenue by 5.7% 47,12 trillion won ($42.5 billion at the exchange rate on March 31, 2015) to 49,78 trillion won (about $43.5 billion).
The day before, reported American giant Apple company for the first time in 13 years has reported a fall in quarterly sales. Apple’s revenue for the first quarter of the fiscal year (second quarter in the American system) were $50.6 billion against $58 billion a year earlier, a decrease of 12.8%. The share of iPhone on the world market fell from 18.3% to 15.3%. Although operating profit from the sale of Apple mobile devices three times the profit of Samsung ($13.9 billion compared to $3.38 billion), a numerical drop in sales of far more than the Korean competitor: in January-March 2016 worldwide has sold 51.2 million iPhone devices vs 61.2 mln a year earlier. After the publication of the quarterly reports of Apple in the shares of the technological giant for the first half hour of trading on April 27 fell by 7%.
Of the three leaders only Chinese Huawei has demonstrated excellence, having expanded over the past year its share in the smartphone market from 5.3 to 8.3%, and increasing sales by 64% — from 17.4 to 27.5 million units, from the data Worldiwide IDC Quarterly Mobile Phone Tracker.
Fatigue from Apple
Good compared to the Samsung Apple performance analysts attributed to successful exit on the market of the concern, the Galaxy s7 and version Galaxy S7 Edge, which is a Bang this February took consumers. According to SamMobile China, from March 11 on these models in China was made more than 10 million pre-orders. As specified by analysts at Counterpoint Research, in China, the sales performance of Galaxy S7 in the first month after the release exceeded the results of Galaxy S6 by 10%. According to IDC, in March, the Galaxy S7 and S7 Edge was heavily sold due to the support of wireless operators.
The fall of Apple’s sales was recorded in almost all markets (except Japan, where revenues for the quarter rose by a quarter to $4.3 billion) and on all major products: iPhone, iPad and Mac. The greatest decline showed the Chinese market, and, on all counts.
In their reporting of Apple highlights the region “greater China” includes PRC, Hong Kong and Taiwan. In this market, quarterly sales fell 26% to $12.5 billion, and for the last two quarter fell 6% to $30.9 billion Respectively, the share of the Chinese market fell in the revenue of Apple from 29% to 25%, nearly losing second place Europe.
Apple explains that the main reason for the fall in Asian sales was the situation in Hong Kong. The local dollar is tied there to the U.S. dollar and the strengthening U.S. dollar had a negative impact on the development of tourism and retail Commerce in Hong Kong. If the fall in revenue in “greater China” grew by 26% in the PRC (excluding Hong Kong and Taiwan) is only 11%.
The day before publication of Apple reporting its first interview with Western media gave Chinese billionaire Jia yuetin, founder of the group LeEco. As a specialist in high technologies — it company engaged in the manufacture of electric vehicles, smartphones and development of online services — businessman called Apple’s “old” firm.
“With all of this, only super-rich people, highly paid professionals who can afford an iPhone in China, is a relatively small percentage — emphasizes Professor Penn Wharton China Center John Zhang. — This means that at some point you will not be able to sustain growth without the introduction of major innovations to keep customers interested”.
Analysts doubt the prospects of new Apple products in Asian markets, for example, the new iPhone model SE, which was released in late March, and sales of which (as assured the head of the company Tim cook) will have a positive impact on the results of the spring quarter. “If the base cost of $399 iPhone SE forced to compete with similar power, but the cheaper devices, primarily in India and China”, — said the expert, IDC Antonio Scarsella.
The increased presence of Apple in China is another obstacle — law. Last week, Beijing blocked on the territory of the PRC iBooks Store, and Movie iTines for buying and downloading books and movies. “Therefore, given the economic slowdown in China and legal problems are there for Apple to achieve an acceptable growth in this market will be much more difficult than in previous years”, — said Thursday the analytical center Juniper.
China slows down world
In the smartphone market slowing China acts as the same deterrent as in the global economy as a whole. IDC identifies several trends in the Chinese mobile phone market. First, it slows its growth. If in 2013 the growth of the previous year was 62.5%, in 2014-th year — 20% and in 2015 2.5%. Secondly, Chinese consumers are becoming more affluent. “As the Chinese market Matures, the appetite for a smartphone is dramatically reduced, since the explosive interest in them has passed its peak,” notes consulting Agency.
And although the average cost of a smartphone has increased from $207 in 2013 to $257 in 2015, Chinese consumers increasingly eyeing the domestic producers, besides Huawei and two little-known on the world market the brands OPPO and Vivo, they entered into the five of leaders of sales, pushing out her two other Chinese companies, Xiaomi and Lenovo. Both brands belong to the group BBK Electronics from Guangdong, its founder, Duan Yongping known as the “Chinese Buffett”.
In January-March 2015 around the world (primarily China and India) have been sold 7.3 million smartphones OPPO, but this year is already 18.5 million (2.2% and 5.5% of global market share respectively). Followed by Vivo with 6.4 million devices last year and 14.3 million in the first quarter of this year.
Fresh data on Chinese business Samsung is still unknown. But a year ago in the Chinese market, Samsung had hard time in the first quarter of 2015, sales of Korean group in China has declined at an annualized rate of 53%. According to IDC, in January-March 2014, the company sold 20.5 million smartphones in China, one year later, only 9.6 million
Then Samsung skipped ahead of not only Apple but also local brands Xiaomi and Huawei, falling from first to fourth place. Accordingly, the market share of Samsung in China fell from 19.9% to 9.7%, while Apple increased from 8.7% to 14.7%.