Two of the largest competitors in the smartphone industry have struggled immensely over the past year. Apple, Inc. (NASDAQ: AAPL) and Samsung indicated slumping sales in the last quarter of 2018. Samsung’s South Korean competitor LG warned of an 80% drop in operating profit in the same period compared to the previous year, as per CNN.
Sales figures have sharply declined over the past year. The industry fell by around 1% in 2018, according to preliminary research by tech consultancies Canalys and Counterpoint Research. IDC, another research firm, forecasted the drop will be as much as 3%. This would mark the first annual decline for the smartphone market.
The world’s largest smartphone market, China, has seen a drop in sales for almost two years. Canalys estimates the market has shrunk by almost 9% in 2018 due to a slowing economy, a weaker currency and an ongoing trade dispute with the United States.
“[In] 2018 the market was so bad that it will be easy for 2019 to be a better year, “ said Tom Kang, a research director at Counterpoint. “[The] first half looks gloomy but second half we can expect things to pan out,” he later added.
The future looks bright for the smartphone market. Industry analysts are predicting a gradual return to growth in 2019. They also predict a sharper pickup in emerging markets, including Africa and India where over a billion people don’t have smartphones, as stated by CNN.
“Those markets will continue to grow, to push up the global smartphone market size,” said Mo Jia, an analyst at Canalys. However, much still hinges on China and its trade war with the United States. Analysts still expect the Chinese market to recover, as both sides attempt to come to an agreement. But for now, clouds remain on the horizon.