Smartphone Sales Drop to 2013 Levels. Should Solution Providers Worry?

Smartphone Sales Drop to 2013 Levels. Should Solution Providers Worry?

Worldwide smartphones to end users totaled 330 million for the second quarter this year, according to research firm Gartner. This is an increase of 13.5 percent, from 290.4 million units from the same period in 2014, marking the slowest overall growth rate since 2013. Should solution providers be concerned?

Uh-oh. Smartphone sales growth is dropping fast. But should solution providers be concerned?

The answer is “no.” Everyone expected growth rates to slow eventually as untapped geographic markets become saturated. So it is no surprise. Further, regardless of the rate of growth, the money for solution providers is in integration, security and application and device management—and that, my friends, is never going to go away.

First the facts:

Worldwide smartphones to end users totaled 330 million for the second quarter this year, according to research firm Gartner. This is an increase of 13.5 percent, from 290.4 million units from the same period in 2014, marking the slowest overall growth rate since 2013, the firm said.

A first-time decline in sales in China and overall lackluster growth for the Android are the main culprits.

"While demand for lower-cost 3G and 4G smartphones continued to drive growth in emerging markets, overall smartphone sales remained mixed region by region in the second quarter of 2015," said Anshul Gupta, research director at Gartner, in a prepared statement.

In fact, excluding China, emerging Asia/Pacific, Eastern Europe and Middle East and Africa were the fastest-growing regions, while smartphone sales in China fell 4 percent for the first time, according to Gartner.

"China is the biggest country for smartphone sales, representing 30 percent of total sales of smartphones in the second quarter of 2015. Its poor performance negatively affected the performance of the mobile phone market in the second quarter," said Gupta said. "China has reached saturation—its phone market is essentially driven by replacement, with fewer first-time buyers. Beyond the lower-end phone segment, the appeal of premium smartphones will be key for vendors to attract upgrades and to maintain or grow their market share in China." 

Specifically, the big two—Samsung and Apple—continue to dominate the market, with Apple cutting into Samsung’s lead. Samsung is still the market share leader but its smartphone sales dropped to 72 million units and 21.9 percent share for the second quarter, from 76.1 million units and 26.2 percent of the marke tin the second quarter of 2014, according to Gartner. Apple continued to gain ground with 48.1 million units shipped representing 14.6 of the worldwide market, down from 35.3 million and 12.2 percent of the market from the year-ago period.

“Despite the launch of new S6 models, Samsung's premium phones continued to be challenged by Apple's large-screen iPhones. Samsung lost 4.3 percentage points in market share and declined 5.3 percent in unit sales in the second quarter of 2015,” Gartner said.

Going down the list, Huawei recorded the highest sales growth rate of 46.3 percent with 25.8 million units sold, representing 7.8 percent of the market, according to Gartner’s research. Lenovo (including Motorola sales) dropped to just 5 percent market share with 16.4 million units sold, from 6.6 percent share and 19 million units sold during the second quarter of 2014, Gartner said.

Meanwhile overall worldwide mobile phone sales for the second quarter were flat, coming in at 445.8 million from 444.2 million in the second quarter of 2014, according to Gartner. Here, too, Samsung led the pack with 88.7 million mobile phones shipped, down from 97 million shipped resulting in a market share drop to 19.9 percent from 21.9 percent. For its part, Apple shipped 48 million mobile phones, capturing 10.8 percent of the market in the second quarter vs. 35.3 million units and 8 percent market share in the second quarter of 2014.

So while overall growth is slowing for smartphones, the market is still growing. And while overall mobile phone shipments are flat, Apple continues to gain ground.

Regardless, nearly the entire world has gone mobile. Solution providers don’t make their living on the actual phone sale but on the integration, support and device management. That will never go away. Stay the course.

Knock 'em alive!

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