Global Smartphone Shipments Down 6.0% in Q3 2018 as the Leading Vendor and the Largest Market Face Challenges, According to IDC

Global Smartphone Shipments Down 6.0% in Q3 2018 as the Leading Vendor and
the Largest Market Face Challenges, According to IDC

FRAMINGHAM, Mass., November 1, 2018 – According to preliminary data from the
International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, smartphone
vendors shipped a total of 355.2 million units during the third quarter of 2018 (3Q18), resulting
in a year-over-year decline of 6.0%. This was the fourth consecutive quarter of year-over-year
declines for the global smartphone market, which raises questions about the market's future. IDC
maintains its view that the market will return to growth in 2019, but at this stage it is too early to
tell what that growth will look like.

While the overall smartphone market has declined for four straight quarters, two things stand
out as major factors in the third quarter. Samsung, the largest smartphone vendor in terms of
market share, accounting for 20.3% of shipments in 3Q18, declined 13.4% year over year in the
quarter. And secondly, China, which is the largest country market for smartphone consumption,
accounting for roughly one third of global shipments, was down as well for the sixth consecutive
quarter.

Samsung had a challenging quarter with shipments down 13.4% to 72.2 million units shipped.
The market share leader continues to feel pressure from all directions, especially with Huawei
inching closer to the top after its second consecutive quarter as the number two vendor. In
addition, growing markets like India and Indonesia, where Samsung has held leading positions
for many years, are being changed by the rapid growth of Chinese brands like Xiaomi, OPPO,
and vivo.

Meanwhile, China’s domestic market, which represents roughly one third of all smartphones
consumed, has been in decline since the second quarter of 2017, and 3Q18 was the sixth
consecutive quarter where the market sees contraction. China was down 11% in the first half
of 2018 (1H18), and the challenges continued into 3Q18. Overall IDC expects this decline to
decelerate with the market returning to flat growth in 2019.

"China's domestic market continues to be challenged as overall consumer spending around
smartphones has been down," said Ryan Reith, program vice president with IDC's Worldwide
Mobile Device Trackers. "High penetration levels, mixed with some challenging economic times,
has slowed the world's largest smartphone market. Despite this, we believe this market will begin

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to recover in 2019 and beyond, driven in the short term by a large, built up refresh cycle across
all segments, and in the outer years of the forecast supported by 5G migration."

"The race at the top of the market continues to be a heated one as Huawei once again slipped past
Apple to the second position," said Anthony Scarsella, research manager with IDC's Worldwide
Quarterly Mobile Phone Tracker. "Although Huawei may have beat out Apple in Q3, the holiday
quarter could have Apple as the market leader thanks to the launch of three new bezel-less
devices. No matter who leads in the overall market the holiday quarter should be an exciting one
with a wide selection of new flagship devices available. With the new iPhones, Mate 20, Pixel
3, V40, Note 9, and OnePlus 6T, we can expect consumers will have a plethora of options when
upgrade time approaches. The vast selection of high-priced handsets should move ASPs in a
positive direction come next quarter."

Smartphone Company Highlights

Samsung had a very challenging quarter with smartphone shipments down 13.4% from 3Q17,
with overall volumes of 72.2 million. While this was still enough to maintain the top market
share position, the company does continue to lose share. The launch of the Galaxy Note 9 was
successful and the device continues to build in shipments. However, Samsung's bigger challenge
is the ground they are losing at the mid-range and low-end. Recent announcements of revamping
the product portfolio to bring new features and awareness to non-flagship models could possibly
help this slide. Samsung will most likely look to new A-Series devices to fill the gaps left in the
mid-tier across numerous markets.

Huawei landed in the number two position for the second straight quarter. While its share was
down slightly from last quarter's 15.9%, overall the company should be pleased with shipping
52.0 million handsets and grabbing 14.6% of the overall market. From a product perspective, its
P-series and recent update to its Mate-series are keeping it as competitive as ever at the top of the
market. And its Honor brand, which is primarily marketed toward a younger audience and online
sales, has continued to do well in many markets.

Apple's newest iPhones helped push third quarter shipments to 46.9 million units, up 0.5% from
the 46.7 million units last year. Apple once again launched three new devices at its Fall event,
as the new 6.5-inch iPhone XS Max and 5.8-inch iPhone XS were joined by the more affordable
iPhone XR in the Apple line-up. The new XS Max and XS continue off the success from last
year's iPhone X but bring a new screen size option with more power and increased performance
to the table. And Apple has once again improved the camera, upped the storage, and added a new
faster processor via the A12 Bionic chip, which is the first 7-nanometer chip for Apple. Older
iPhones, such as the 6S, 7, and 8, all received price cuts late in the quarter, which will balance the
iPhone portfolio across all price tiers for the holiday quarter. The older SE and iPhone X from
last year have been dropped from the Apple line-up. The fourth quarter will include shipments for
the vastly popular iPhone XR, which have not been counted in IDC's Q3 figures.

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Xiaomi once again grew its share to a new company high capturing 9.7% of all smartphones
shipped worldwide in 3Q18. Xiaomi continues its global expansion with market share gains
in countries where it has been growing it presence, including India and Indonesia, and making
headway into European markets like Spain where it continues to cause disruption. Its Redmi
5A, Redmi 5 Plus, and Redmi Note 5 have continued to do well, with the newer Redmi 6/A/Pro
successors ramping up quickly.

OPPO like Samsung saw shipments decline year over year, although on a much smaller scale.
Despite that, OPPO remained the number 5 vendor in terms of market share with 29.9 million
shipments in 3Q18, down 2.1% from a year ago. Like a few of its competitors that continue to
climb the smartphone ladder, OPPO is beginning to gain global attention for some of its newer
flagship devices that have come with highly marketed launch events. Designs on the Find X and
R17 products are raising the bar for OPPO, and in return they are continuing to see their user
ASPs increase.

Top 5 Smartphone Companies, Worldwide Shipments, Market Share, and Year-Over-
Year Growth, Q2 2018 (shipments in millions of units)
Company         3Q18            3Q18 Market 3Q17                3Q17 Market 3Q18/3Q17
                Shipment        Share       Shipment            Share       Change
                Volumes                     Volumes
Samsung         72.2            20.3%            83.3           22.1%           -13.4%
Huawei          52.0            14.6%            39.1           10.4%           32.9%
Apple           46.9            13.2%            46.7           12.4%           0.5%
Xiaomi          34.3            9.7%             28.3           7.5%            21.2%
OPPO            29.9            8.4%             30.6           8.1%            -2.1%
Others          119.9           33.8%            149.8          39.6%           -19.9%
Total           355.2           100.0%           377.8          100.0%          -6.0%
Source: IDC Quarterly Mobile Phone Tracker, November 1, 2018

Notes:

     •     Data are preliminary and subject to change.
     •     Company shipments are branded device shipments and exclude OEM sales for all
           vendors.
     •     The "Company" represents the current parent company (or holding company) for all
           brands owned and operated as a subsidiary.

Figure 1

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About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts
for hundreds of technology markets from more than 100 countries around the globe. Using
proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly,
and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and
on-line query tools.

For more information about IDC's Worldwide Quarterly Mobile Phone Tracker, please contact
Kathy Nagamine at 650-350-6423 or knagamine@idc.com.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence,
advisory services, and events for the information technology, telecommunications, and consumer
technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and
local expertise on technology and industry opportunities and trends in over 110 countries. IDC's
analysis and insight helps IT professionals, business executives, and the investment community
to make fact-based technology decisions and to achieve their key business objectives. Founded in

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1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading
media, data and marketing services company that activates and engages the most influential
technology buyers. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter
at @IDC and LinkedIn.

About IDC
IDC is the premier global provider of market intelligence, advisory services, and
events for the information technology and telecommunications industries. IDC helps IT
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decisions on technology purchases and business strategy. Over 775 IDC analysts in
50 countries provide global, regional, and local expertise on technology and industry
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For more information contact:
Ryan Reith
rreith@idc.com
+1 650-350-6242
Melissa Chau
melissachau@idc.com
+65 6829 7713
Anthony Scarsella
ascarsella@idc.com
+1 508-935-4712
Michael Shirer
press@idc.com
+1 508-935-4200

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