Apple isn’t the only smartphone manufacturer seeing falling sales. New figures from Strategy Analytics show what the global smartphone market saw its first-ever year-on-year drop on sales, down 3%.

Linda Sui, Director at Strategy Analytics, said, “Global smartphone shipments fell 3 percent annually from 345.0 million units in Q1 2015 to 334.6 million in Q1 2016. It is the first time ever since the modern smartphone market began in 1996 that global shipments have shrunk on an annualized basis. Smartphone growth is slowing due to increasing penetration maturity in major markets like China and consumer caution about the future of the world economy.”

Apple’s fall was of course far more dramatic, iPhone sales down 18% year-on-year, with CEO Tim Cook blaming economic ‘headwinds’ – and Strategy Analytics’ numbers show that strong competition from Chinese brands forms a large part of those …

Both Huawei and Oppo saw strong gains. Huawei saw its market share climb from 5% to 8.5%, while Oppo almost doubled its share from 2.4% to 4.6%. Apple saw its own share slip from 17.7% to 15.3%. The market intelligence company said that ‘pressure is mounting for Apple to innovate a new wow design.’

Apple noted that China played a big role in its fall in sales, reporting that revenue there was down 26% year-on-year – much larger falls than experienced in the U.S. and Europe. Cook singled out Hong Kong, but analysts cited by the WSJ said that this is reflective of China as a whole.

Analysts said Hong Kong’s retail weakness is a part of the overall slowdown in mainland China, since many of the city’s shoppers are Chinese tourists.

Gartner analyst CK Lu said that while the iPhone 7 should see Apple return to growth in China, it will face price pressure from local brands.

We believe Apple still has its brand premium in China, but its sales mix is moving to lower average selling price.

It will be interesting to see next quarter what impact the lower-cost iPhone SE has had, both on iPhone sales in China and on the average selling price.


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