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Gartner: iPhone Sales Suffered Worst Quarterly Decline for Three Years Over 2018 Holiday Period

Apple recorded its biggest decline in iPhone sales for almost three years over the holiday quarter, according to new market research data by Gartner.




Apple sold 64 million iPhones in the fourth quarter of 2018, down from 73 million in Q4 2017. Those numbers followed a pattern of declining smartphone sales globally in Q4 2018, with growth of just 0.1 percent over the period and 408.4 million units shipped.

Despite retaining its second place position with 15.8 per cent market share behind market leader Samsung (17.3 percent), Apple bared the brunt of the decline, seeing its 18 percent global market share in Q4 2017 reduced to 16 percent in Q4 2018.

The analyst firm said iPhone sales were hit hardest in Greater China, where it found Apple's market share dropped to 8.8 percent in Q4, down from 14.6 percent in Q4 2017. Samsung also recorded a smaller market share over the holiday period year on year, recording 17 percent, down from 18 percent in 2017.

Third-placed Huawei closed the gap on Apple by selling 60 million phones in Q4 2018, up from 44 million in Q4 2017, expanding its share from 10.8 percent in Q4 2017 to 14.8 percent. Oppo, in fourth, registered 7.6 percent, up from 7.3 percent in Q4 2017, while Xiaomi took a 6.8 percent share, down slightly from 6.9 percent the previous holiday quarter.
"Demand for entry-level and midprice smartphones remained strong across markets, but demand for high-end smartphones continued to slow in the fourth quarter of 2018," said Anshul Gupta, senior research director at Gartner. "Slowing incremental innovation at the high end, coupled with price increases, deterred replacement decisions for high-end smartphones."

For 2018 as a whole, global smartphone sales grew by 1.2 percent year on year, with 1.6 billion units shipped. Market leader Samsung saw a 1.9 percent decline in share and Apple lost 0.6 percent over the previous year, but Huawei, Xiaomi and Oppo all saw overall gains of 3.2 percent, 2.1 percent, and 0.3 percent, respectively.

According to Gartner, Chinese brands actually boosted their overall sales thanks to broad appeal in emerging markets like China and India, while the worst declines of the year took place in North America and mature Asia/Pacific market regions.

Beyond the overall slowdown in the smartphone market, Gartner put Apple's poor quarterly performance down to buyers delaying upgrades and compelling alternatives from Chinese vendors.
"Apple has to deal not only with buyers delaying upgrades as they wait for more innovative smartphones, but it also continues to face compelling high-price and midprice smartphone alternatives from Chinese vendors. Both these challenges limit Apple’s unit sales growth prospects," said Gupta.
Last month, Apple issued a rare warning that revenue for the quarter would come in at least $5 billion below the company's original guidance, with Apple pointing to a number of factors including the later launch of the iPhone XR, general weakness in China, and fewer upgrades as customers took advantage of Apple's reduced pricing on battery replacements in 2018 to extend the lives of their current phones.

Apple later posted revenue of $84.31 billion and net quarterly profit of $19.965 billion, compared to revenue of $88.3 billion and net quarterly profit of $20.1 billion, in the year-ago quarter. However, even with the earnings warning, the quarter was the second-best in Apple's history in terms of overall revenue and profit, trailing only the first fiscal quarter of 2018.

Apple CEO Tim Cook recently said that the company is "rethinking" iPhone prices outside of the United States and may lower prices to boost sales. Apple has already started lowering the price of the iPhone for third-party distributors in China, and price cuts could also be introduced in other areas like India and Brazil, where the iPhone is prohibitively expensive and has seen stalled growth due to high pricing.

Tag: Gartner


Top Rated Comments

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5 weeks ago
On a positive note, this might actually help them remember they have a computer business.
Rating: 41 Votes
5 weeks ago
Apple needs to lower the prices of the XS and XS Max by at least 300 euro in Europe. A possible 100 euro price drop isn't going to cut it. And even at that price point they're moderatly competitive compared to other brands. If you look outside west Europe, the price of an iPhone is a month's wage or sometimes even more.
Rating: 31 Votes
5 weeks ago
Conclusion: Price is not high enough.

Let's do it again, Timmy!
Rating: 30 Votes
5 weeks ago
And it likely won’t get any better for them. It’s just the beginning of the slide.
Rating: 27 Votes
5 weeks ago
Maybe now we can get the SE2 in the size of the current SE, but with 4.5" display, waterproof, A12 processor and USB-C. And a headphone jack pls, because **** latency, lower audio quality and having another thing to charge.
For about $500.
Rating: 20 Votes
5 weeks ago
I mean what did they expect? The price of a flagship iPhone has nearly doubled in price in a pretty short amount of time. You can’t expect to be number 1 in smart phone sales at those prices when cheaper alternatives exist especially outside of the USA. That’s like Ferrari expecting to be the best selling car in the world.
Rating: 16 Votes
5 weeks ago

It’s amazing to me that selling 64 million devices in one quarter is considered to be a problem.


It's almost as amazing as someone not seeing "the biggest decline in iPhone sales for almost three years" as a problem.
Rating: 13 Votes
5 weeks ago

Price isn't an issue to many. Lack of innovation in the XS line definitely is.

Nope, price is the issue. iPhones were already very expensive. Now they are insanely expensive. The market has spoken. If Timmy and Schiller want the iPhone ecosystem too be more healthy they need to stop working for Wall St.
Rating: 12 Votes
5 weeks ago
Yes. Because we want phones like the iPhone 5 (SE), and iPhone 8 form factors, not this garbage. Not to mention its extremely overpriced.
Rating: 10 Votes
5 weeks ago
It’s amazing to me that selling 64 million devices in one quarter is considered to be a problem.
Rating: 10 Votes

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