Worldwide smartphone sales in the first quarter of 2016 fell by 18.6 percent to 292 million devices compared with the fourth quarter of 2015, but Apple's performance was even worse, with its iPhone shipments dropping by 43.8 percent in Q1.
Market saturation led to the drops in shipments, according to a new global smartphone report from research firm TrendForce, which also found that compared with the same quarter one year ago, overall smartphone shipments are down 1.3 percent.
Apple certainly didn't need the TrendForce report to see its recent sales drops, which showed up in the company's first-quarter earnings in January, when its sales of 74.7 million iPhones were little changed from the 74.5 million sold in the same quarter a year earlier.
The TrendForce report says that "leading brands such as Samsung and Apple no longer have the same growth momentum as before, so the overall shipments depended on contributions from Chinese brands and rising demand in India and other emerging markets" to take up the slack. Those sales, however, failed to make up for the lower growth being seen by Samsung and Apple.
Most significant in the report's figures is that Apple "posted its largest quarterly decline ever for iPhone shipments, plummeting 43.8 percent from 75 million units in last year's fourth quarter to just 42 million units in this first quarter," the report states. Contributing to the lower iPhone shipments is the company's iPhone 6 design, which "lacks exciting new features," the report stated.
Apple's latest iPhone SE went on sale in March with a smaller size and other improvements, but the new device is not expected to help Apple turn its falling sales figures around, Avril Wu, a TrendForce smartphone analyst, said in a statement.
"As the budget model, iPhone SE will support Apple's overall shipments in the second quarter before the next major iPhone release," said Wu. "However, iPhone SE is going to face severe price competition from Chinese branded products in its target market, which is the mid-range device segment. This year's iPhone SE shipments are projected to come in below 15 million units and they are unlikely to help turn around the weak annual shipment result for Apple."
TrendForce has lowered its iPhone shipment estimate for 2016 to 213 million units, which is almost 10 percent lower than iPhone shipments a year ago.
Meanwhile, combined smartphone shipments, including exports, from several Chinese brands rose to 125 million units in Q1, which surpassed the combined shipments from Samsung and Apple for the first time, the study reported.
All told, Chinese brands accounted for 42.9 percent of the global smartphone shipments, up from 41.5 percent in the previous quarter. In China itself, increasing subsidies for 4G smartphones from Chinese telecom operators helped keep sales strong, while sales in foreign markets also increased, the report said. "As a result, Chinese smartphone makers did not suffer as steep shipment decline as their foreign competitors did in the off-peak season of the first quarter. Their combined quarterly shipments fell by only 16 percent."
Q1 shipments for Samsung "exceeded expectations" and reached 81 million units, which was up 2.5 percent from the prior quarter, according to the report. "Samsung boosted its smartphone sales by launching its flagships Galaxy S7 and S7 Edge ahead of schedule and stepping up its promotional activities. Additionally, the vendor's J series, which consists of entry-level devices with high cost-performance ratios, has been a success in China and worldwide."
With those indicators, TrendForce raised Samsung’s 2016 shipment projection to 316 million units, which is on par with 2015's shipments.
Samsung still leads the global market share wars, with a 27.8 percent share in Q1 2016, followed by Apple at 14.4 percent, Huawei at 9.3 percent, Lenovo at 5.8 percent, Xiaomi at 5.5 percent and LG at 5.1 percent, according to TrendForce. In the fourth quarter of 2015, Samsung had a 22.1 percent market share, followed by 20.9 percent for Apple, 9.5 percent for Huawei, 5 percent for Lenovo, 5 percent for Xiaomi and 4.5 percent for LG. All other brands make up the rest of the market.