Smartphone sales remain in doldrums as wearable shipments soar

Trade tensions help drag shipments of smartphones lower but rebound forecast

The Samsung Galaxy Watch. Sales of wearable devices soared in the first quarter, new figures show.

The Samsung Galaxy Watch. Sales of wearable devices soared in the first quarter, new figures show.

 

Smartphone sales will remain weak this year, according to two new forecasts. However, they are expected to rebound in 2020.

Research company Canalys predicts that smartphone shipments will reach 1.35 billion units in 2019, down 3.1 per cent compared with last year. It attributed the slowdown in sales to a number of factors, most notably, the uncertainty arising from global trade tensions and the US government’s ban on businesses working with Huawei.

“We expect the other major smartphone vendors will have short-term opportunities while Huawei struggles. Samsung will be the biggest winner, thanks to its aggressive device strategy and its ability to quickly ramp up production, though the Korean firm may struggle to entirely fill the shortfall,” said Rushabh Doshi, research director, Canalys.

“It will take other vendors until late 2019 to react to the new opportunities. Samsung’s control over component supply gives it a major advantage,” he added.

IDC also predicted another challenging year for smartphone shipments with volumes forecast to decline 1.9 per cent. This would mark the third consecutive year of market contractions.

5G handsets

The research company said it expected shipments in the first half of 2019 to be down 5.5 per cent compared with the same six months a year earlier. However, it predicted a sales boost in the second half due to the introduction of more 5G handsets, a growing selection of lower-priced premium handsets, and sales in ‘emerging’ markets such as India.

Android’s smartphone share is forecast to increase slightly to 86.7 per cent from 85.1 per cent this year with volumes are expected to grow at a five-year compound annual growth rate of 2.1 per cent with shipments of 1.32 billion in 2023.

Shipments volumes of iPhones are expected to drop to 183.5 million in 2019, down 12.1 per cent year on year, in part as a result of the fact that Apple is unlikely to deliver a 5G handset until 2020.

A second IDC forecast reveals that while smartphone sales might have slumped, shipments of wearable devices rocketed in the first quarter, jumping 55.2 per cent compared with the same period a year earlier.

While wrist-worn wearables accounted for the majority of the market with 63.2 per cent share, ear-worn devices experienced the fastest growth, rising 135.1 per cent year on year.

“The elimination of headphone jacks and the increased usage of smart assistants both inside and outside the home have been driving factors in the growth of ear-worn wearables,” said Jitesh Ubrani research manager for IDC Mobile Device Trackers.

“Looking ahead, this will become an increasingly important category as major platform and device makers use ear-worn devices as an on-ramp to entice consumers into an ecosystem of wearable devices that complement the smartphone but also offer the ability to leave the phone behind when necessary,” he added.

Apple is ranked as the leading wearable company, having shipped 12.8 million units in the first quarter. It is followed by Xiaomi, Huawei, Samsung and Fitbit.