Global smartphone shipments are in free fall, with iPhone seeing the biggest drop

 The global smartphone market continues to show a weak trend, with overall shipments falling. According to the Canalys report, global sales in the first quarter of this year totaled 313.9 million units, the lowest point in the past five years and the sixth consecutive quarter of decline in smartphone shipments.

       Canalys reported that the smartphone shipments in this state could be described as a "free fall". Among the world's first-tier mobile phone brands, Apple was hit the hardest, with a year-on-year decline of 23.2%.

In addition, IDC also released a global smartphone market research report for the first quarter of 2019. The total global smartphone shipments in the first quarter were 310.8 million units, a year-on-year decrease of 6.6%. Among the world's first-tier mobile phone brand manufacturers, Apple's mobile phone shipments fell by 30.2% year-on-year.

       Among them, Huawei's mobile phone market performance was strong, with the largest increase in shipments. According to IDC data, Huawei's global shipments in Q1 were 59.1 million units, a year-on-year increase of 50.3% (an increase of 19.8 million units), and its market share increased by 7.2% to 19.0% (from 11.8% to 19.0%). Its shipments once again surpassed Apple (by 22.7 million units), consolidating its second place.

iPhone revenue share fell 17.32%

       The sharp decline in Apple's mobile phone shipments is directly reflected in its performance. According to the latest financial report released by Apple recently, Apple's revenue in Greater China in the second fiscal quarter was US$10.218 billion, down from US$13.024 billion in the same period last year. Apple's revenue in the second fiscal quarter was US$58 billion, of which iPhone revenue was US$31.051 billion, down 17.32% from US$37.559 billion in the same period last year.

       This also marked the largest decline in iPhone sales for 10 consecutive quarters. The iPhone’s contribution to Apple’s overall revenue also dropped by nearly 8 percentage points, the lowest since 2015.

       Among them, Apple's sales revenue in the Greater China market fell 21.5% from $13 billion in the same period last year to $10.2 billion. This is also the second consecutive quarter that Apple's sales revenue in Greater China has fallen by more than 20%. Sales revenue in Japan rose slightly by 1.2% year-on-year to $5.5 billion; revenue in other Asia-Pacific regions fell 8.7% year-on-year to $3.6 billion.

       Apple has faced slowing iPhone sales in major markets such as China, and the iPhone posted its first year-on-year decline in the holiday shopping season at the end of last year, largely due to high iPhone prices and competition from rivals such as Huawei, Xiaomi, and O/V.

       In a conference call with analysts after the earnings report was released, Tim Cook said, "We have made substantial price adjustments and trade-in plans for iPhone in emerging markets. These price adjustments have achieved very good results, and users have a great demand for upgrading their phones. The implementation of these measures helped iPhone sales to recover at the end of the second fiscal quarter.

       Cook officially responds to 5G iPhone

       Despite Apple's measures to boost iPhone sales, it is still difficult to see a clear change in the situation. Analyst Ben Stanton said, "This is the largest single-quarter plunge in iPhone history, and it once again proves that Apple is in a very difficult situation in China, its second largest market. But this is not the only problem. The failure of the trade-in program to offset the extension of consumers' replacement cycle is the main reason for the decline in US shipments. In markets such as Europe, Apple's strategy is to use discounts to increase sales, but this has caused a lot of problems for distributors and blurred the positioning of "high-end" devices and the value label in the eyes of consumers."

       There are still many problems that need to be solved in this regard, but there are also some bigger problems that need to be paid attention to, such as global economic problems and the slowdown of user upgrade cycles. The iPhone XS is far less eye-catching than before. Stanton added that the iPhone did not show signs of recovery in this quarter, but there is still hope for the second quarter.

However, more mobile phone manufacturers are switching to foldable screens and 5G phones, and the new iPhone will lack innovation in this area this year. Apple's more signs point to a launch in 2020, when Apple will update its 5G phones in the hope of driving changes in iPhone shipments.

       Cook also officially responded to the situation of 5G iPhone at the earnings conference. Cook said that 5G is not an issue that Apple is considering at present, and said that Apple will carefully evaluate various new technologies and then launch products as soon as possible under the right time and conditions.

Cook also added that the transformation and application of new technologies will put certain pressure on costs, and that technology has different directions, such as DRAM and NAND. They are currently unable to predict what the next direction of new technology will be, and it depends on the development of multiple factors.

       It is worth mentioning that analysts are optimistic that innovations such as 5G and foldable phones can shake up the current stagnant market. However, if Apple finds it difficult to change the current situation of declining iPhone shipments and only launches the 5G iPhone in 2020, nearly a year behind Samsung and Huawei, the iPhone's market share may be further compressed by then.