Smartphone sales slump as buyers shun upgrades

New figures from Gartner show a 2.7 per cent drop in smartphone sales in the first quarter of 2019.

Global sales of smartphones continued to decline at the start of 2019 as more consumers were happy to hold on to their existing handsets for longer rather than upgrade to the latest model.

This is according to new figures from Gartner, which found overall sales dropped by 2.7 per cent in the first three months of the year, with 373 million units sold around the world.

The study noted premium devices have been particularly affected by this, with demand significantly lower than for less-expensive basic models.

Gartner highlighted rising prices for high-end models and slowing innovation in the sector as among the main reason why buyers are looking to stick with their existing devices for longer. This means individuals do not see any reason to shell out large amounts of money – often now £1,000 or more for the higher-end devices – for what are only incremental improvements in features and performance.

Anshul Gupta, senior research director at Gartner, said Apple has been particularly affected by this, with users struggling to see any value in upgrading their device. He noted that while price cuts across multiple markets have helped boost demand, this has not been enough to restore the company to growth. Overall, Gartner found the US firm sold 44.6 million smartphones in the quarter, a drop of 17.6 per cent year-on-year.

This meant it lost second place in the global market to Huawei, which was able to defy the overall trend and increase its sales by 44.5 per cent, performing especially well in Europe and its home market of China, where it grew by 69 per cent and 33 per cent respectively.

However, recent moves from the US government to prevent firms in the country from doing business with Huawei are set to have a big impact on its performance in the coming months. In particular, the prospect of being shut out from key Google apps, including the Play Store, Maps and YouTube, could seriously affect its performance in markets like Europe.

Mr Gupta said: “Unavailability of Google apps and services on Huawei smartphones, if implemented, will upset Huawei’s international smartphone business, which is almost half of its worldwide phone business. Not the least it brings apprehension among buyers, limiting Huawei’s growth in the near term.” 

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