U.S. Markets open in 4 hrs 52 mins

Smartphone Shipments to Fall in Q1 in Challenge to Apple and Samsung

Douglas A. McIntyre

The chance that smartphone sales would decrease after years in which the devices had taken the place of PCs among tens of millions of consumers worldwide was considered low. However, the process has already begun, making an already crowded sector, in which market share is dear, even more challenging.

Accord to a research firm:

Worldwide smartphone shipments reached 265 million units in 4Q13, showing a growth of 6.5% QoQ and 32.2% YoY, according to TrendForce’s research. Thanks to the recent momentum brought about by Apple’s new iPhones, the proportion of high-end smartphone devices shipped jumped from 35% in 3Q13 to 37% in 4Q13, whereas that for the mid to low-range models (ie. those whose prices fall within the range of US$450~US$150) remained at approximately 50%. For the entire 2013, worldwide smartphone shipments increased by an estimated 33.5% YoY, ending at approximately 945 million units. With smartphone makers ramping up Q4 shipments as a means to fulfill 2013 sales targets and pressures related to inventory digestion mounting, TrendForce projects that the global smartphone shipments will drop by an estimated 5.1% in 1Q14.

ALSO READ: States With the Best (and Worst) Schools

As Apple and Samsung jockey for leadership across the globe, the next challenge is that previously weak manufacturers will become greater competitors. TrendForce claims that Samsung shipped 80 million devices in the fourth quarter of 2013, and Apple shipped 50 million. If the forecast about Apple is correct, iPhone sales will have reached a level which would help cement its position as a rapidly growing smartphone vendor, and partially justify the launch of the iPhone 5s and 5c.

The research firm predicted:

The two noteworthy “dark horses” in the industry who are currently worth paying attention to, according to TrendForce, are SONY and LG. Due to its increased efforts in the field of smartphones and hardware components, SONY has been able to boost its domestic market share to over 20% over the years. Its product shipments, meanwhile, saw a series of noticeable growth since 1Q13, with the total numbers of smartphones shipped reaching an estimated 12 million units in 4Q13, a 1.6% QoQ and 62% YoY increase. In 3Q13, Sony’s global smartphone market share rose to approximately 5%. Benefiting from Google’s Nexus smartphone orders, the other noteworthy dark horse, LG, managed to ship a total of 11 million smartphone units during 4Q13 (2% QoQ and 57% YoY growth). The company's worldwide market share, meanwhile, grew to approximately 4.2%.

ALSO READ: The Worst Product Flops of 2013

Sony Corp.'s (SNE) smartphone business was left for dead when it ended its joint venture with Ericsson. LG has been considered primarily a vendor of second-tier devices as measured by prices and features.

TrendForce had little to say about what the smartphone industry would face in future years, but if the current quarter is an indication, it has become a zero sum game.

Related Articles