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For the first time ever, smartphone sales go down year-over-year

According to Gartner, smartphones fell in units sold from Q4 2016 to Q4 2017, the first time since 2004. What does this mean for the industry?

Published onFebruary 22, 2018

  • For the first time since tracking the smartphone industry began, sales have dropped year-over-year.
  • While this 5.6 percent drop in sales is notable, it is not surprising. The market has definitely reached a saturation point.
  • Despite the overall drop, Samsung, Xiaomi, HUAWEI, and OPPO all increased their relative market shares.

Smartphone sales fell overall in the last quarter of 2017 for the first time ever. Research and advisory company Gartner started tracking the global smartphone market in 2004 (right around the release of the Palm Treo 650, for those old enough to remember that). Since then, each passing year saw smartphone sales increase or level off, until now.

In Q4 2016, smartphone sales topped out at about 432 million units sold. In Q4 2017 there were only approximately 408 million units sold. That’s a drop of about 5.6 percent.

Gartner has two theories for the drop: upgrades from feature phones to smartphones have slowed, and people are keeping their current smartphones longer than they used to. These theories are sound, but after 14 years of availability, pretty much everyone who wants a smartphone probably has one. The only people going without are either in developing nations or simply don’t want one.

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The sales drop is no doubt remarkable, due to it being the first time, but hardly surprising. Smartphones have reached a saturation point and each new one released looks and works a lot like the previous year’s phones. It was only a matter of time before the momentum slowed.

Still, the Q4 report isn’t all bad news. According to Gartner, Samsung increased its market share from 17.8 percent to 18.2 percent, putting it in a clear lead ahead of rival Apple. Last year, both companies were neck-and-neck, with Samsung only ahead of Apple by about 700,000 units. However, both companies dropped in units sold overall.

Xiaomi nearly doubled its market share from 3.6 percent in Q4 2016 to 6.9 percent in Q4 2017. Huawei and Oppo both saw slight increases as well. Xiaomi actually moved almost 79 percent more product YOY in Q4 2017, which is incredible.

Notably, Gartner did not supply results from manufacturers like LG, Lenovo, HTC, Sony, OnePlus, Essential, or even Google. All those companies just got lumped into the “Other” category.

You can see the chart of Gartner’s results below:

gartner q4 2017
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