IDC: Smartphone shipments down 1.8% in Q2 2018, Huawei passes Apple for second place

For the first time in seven years, Samsung and Apple have not taken the top two positions in the worldwide smartphone market. All hail Huawei. Although Samsung held onto first place — the South Korean giant typically dominates the first three quarters of the year, with the U.S. company winning the fourth quarter — Huawei passed Apple for second place this past quarter.

Smartphone vendors shipped a total of 348.2 million smartphones worldwide in Q2 2018, down 1.8 percent from the 348.2 million units in Q2 2017. Of the top five (Samsung, Huawei, Apple, Xiaomi, and Oppo), only Samsung shipped fewer units than the year before. The Q2 2018 figures come from IDC (though Canalys and Strategy Analytics both agree that Huawei passed Apple in the quarter), which summarized its findings in the following chart:

As you can see above, Samsung lost 2.0 percentage points (from 22.9 percent to 20.9 percent) as it shipped 8.3 million fewer smartphones (71.5 million). Samsung typically owns about a fifth of the market, and that remains unchanged. The Galaxy S9 and Galaxy S9+ simply did not deliver. Samsung blamed the slowdown on intensified competition at the high end and an overall sluggish smartphone market. All eyes are now on the Galaxy Note9, to be announced on August 9.

Huawei gained a whopping 4.8 points, hitting a new high of 15.8 percent market share. Passing Apple required quite the jump. Huawei is still closer to Apple than it is to Samsung, but if it can keep the momentum going, the Chinese company will have successfully dismantled the duopoly held by its two biggest competitors. Huawei’s P20/P20 Pro series found strong demand, as did Honor models sold via online channels.

Apple’s share, meanwhile, grew 0.3 points (from 11.8 percent to 12.1 percent), thanks to slight iPhone gains. The iPhone 8, iPhone 8 Plus, and iPhone X are chugging along, as well, with Apple specifically noting that the iPhone X was the top seller. The expected launch of three next-generation iPhone models this fall could help the company reclaim second place.

Xiaomi jumped 2.9 points (to 9.3 percent) and Oppo gained 0.6 points (to 8.6 percent). Huawei has a bigger lead over Apple than Apple has over Xiaomi, which was unfathomable just a few quarters ago.

Companies outside of the top five together lost 6.9 points. The top five leaders are increasingly dominating, and it wouldn’t surprise me if they all soon held double-digit shares of the pie. Consumers no longer seem to be as obsessed with upgrading to the latest and greatest, but when they do, they’re increasingly considering the Chinese trio instead of the de facto Samsung or Apple options.

“Globally, as well as in China, a key bellwether, smartphone consumers are trading up to more premium devices, but there are no longer as many new smartphone converts, resulting in shipments dropping,” IDC associate research director Melissa Chau said in a statement. “When we look at it from a dollar value perspective, the smartphone market is still climbing and will continue to grow over the years to come as consumers are increasingly reliant on these devices for the bulk of their computing needs.”

“The continued growth of Huawei is impressive, to say the least, as is its ability to move into markets where, until recently, the brand was largely unknown,” IDC program vice president Ryan Reith said in a statement. “It is worth noting that Apple moved into the top position each of the last two holiday quarters following its product refresh, so it’s likely we’ll see continued movement among the top-ranked companies in 2018 and beyond. For most markets, the ultra-high end ($700+) competition is largely some combination of Apple, Samsung, and Huawei, depending on the geography, and this is unlikely to change much in the short term. At the same time, Xiaomi, OPPO, and vivo are all slowly pushing their customer base upstream at a price tier slightly lower than the top three. This is an area they should all watch closely, as the builds in this segment are getting increasingly more advanced.”