Smartphone sales have plummeted, and Huawei is taking the biggest hit

Advertisement
Smartphone sales have plummeted, and Huawei is taking the biggest hit
The Huawei Mate XS.Isobel Hamilton/Business Insider
  • Smartphone sales declined by 20.2% in the first quarter of 2020 as a result of impacts from the COVID-19 pandemic, according to Gartner.
  • Huawei took the biggest hit, with market growth dropping by 27.3% in Q1 2020 compared to Q1 2019.
  • Not only is Huawei grappling with the impacts of the coronavirus along with the rest of the industry, but it's also at a disadvantage because it cannot use Google's software and app store.
  • The results come after the smartphone industry has been struggling in recent years as consumers are finding high-end phones less appealing.
Advertisement

It's shaping up to be a rough year for the smartphone market so far. Lockdown orders and the economic fallout from the coronavirus have made it challenging for consumers to spend on nonessential products like smartphones, sending sales plummeting, according to the latest report from market research firm Gartner.

Smartphone sales declined by 20.2% in the first quarter of 2020, with all of the top five smartphone makers seeing sales drop except for Chinese smartphone giant Xiaomi. Huawei took the biggest hit of all, with market growth plummeting by 27.3% year-over-year. Samsung's market growth dropped by 22.7%, comparatively, while Apple's dropped by 8.2%.

The International Data Corporation, which also tracks smartphone sales, published similar results in late April, saying that the smartphone market suffered its biggest year-over-year decline in the first quarter of 2020 because of the coronavirus.

Even though Huawei saw the biggest drop, it still held its number two spot in the global smartphone market, outpacing Apple, Xiaomi, and Oppo, playing second to only Samsung.

Huawei is at a particular disadvantage because it can no longer use Google's version of Android and its family of popular apps, like Gmail and Google Maps, since Google is barred from doing business with the Chinese tech giant.

Advertisement

President Trump signed an executive order last May barring American companies like Google from doing business with Huawei over national security concerns. That order was recently extended that order through May 2021, although the tech giant has been gaining temporary licenses to work with US companies.

Huawei has developed its own mobile software and apps to replace Google's, called Huawei Mobile Services, but the company will still likely struggle to gain traction outside of China, Gartner says.

"Huawei will have a challenging year," Anshul Gupta, a senior research analyst at Gartner, wrote in a release announcing the results. "It has developed the Huawei Mobile Service (HMS) ecosystem, but with the lack of popular Google apps and Google Play Store, Huawei is unlikely to attract new smartphone buyers in international markets."

The smartphone market has been faltering in recent years as demand for high-end premium smartphones, such as top-of-the-line models from Samsung and Apple, has been sluggish. In the first quarter of 2019, for example, Gartner cited "slowing innovation in flagship smartphones and rising prices" as a reason for customers holding onto their smartphones for longer periods of time, in turn contributing to lower sales.

The situation seemed less bleak in the third quarter of 2019, as Canalys Insights, another research firm, found that smartphone sales had actually grown for the first time in two years. But it only grew by 1% according to Canalys, and Gartner reported that the market had actually shrunken by 0.4%.

Advertisement

Some smartphone makers have been combating this trend by releasing cheaper models, like Apple's $400 iPhone SE and Samsung's $400 A151. But the coronavirus pandemic presented new challenges: customers have spent more time indoors, Americans have had less expendable income after record job loss, and tech giants have seen their international supply chains and retail operations disrupted.

Read the original article on Business Insider
{{}}