Smartphone sales: iPhone slides as Huawei, Oppo, and Xiaomi close in on the leaders

Android continues to grow at the expense of iOS and Windows Mobile, but that doesn't mean all is rosy for Android makers.

Huawei P9 smartphone

Huawei is one of the Chinese smartphone makers closing in on Samsung and Apple.

Image: Steve Ranger/ZDNet

Smartphone sales have crept up slightly, but Huawei, Oppo, and Xiaomi have begun to close in on market leaders Apple and Samsung.

According to calculations by market researcher Gartner, 349 million smartphones were sold worldwide in the first quarter of 2016, a 3.9 per cent increase over the same period in 2015. Smartphones now account for nearly four out of five (78 per cent) mobile phones sold.

Gartner said that smartphone sales were driven by demand for low-cost devices in emerging markets and for affordable 4G smartphones -- market drivers that have played to the strengths of emerging brands rather than the leading players.

According to Anshul Gupta, research director at Gartner, these changing smartphone market dynamics mean that Chinese manufacturers are emerging as global brands. Two Chinese companies made it into the top five worldwide smartphone vendors in the first quarter of 2015, with 11 per cent of the market. In the first quarter of 2016, that had jumped to three Chinese brands -- Huawei, Oppo ,and Xiaomi -- grabbing 17 per cent of the market between them.

garnterchartmay.png

Oppo had the best performance in the quarter, moving into the number four slot with sales up 145 percent, seeing strong growth in China and taking market share from players like Lenovo, Samsung, and Yulong. Huawei saw strong smartphone demand in Europe, the Americas, and Africa, while Xiaomi and Oppo saw their smartphone sales in emerging Asia/Pacific markets rise by 20 percent and 199 percent respectively.

Although its overall market share was slightly down, Samsung extended its lead over Apple, which had its first double-digit decline year-on-year, with iPhone sales down 14 percent.

Android continues to dominate the smartphone operating system market, with 84 percent of the market: iOS declined from 17.9 to 14.8 percent, while Windows Phone dropped from 2.5 percent to less than 1 percent as Microsoft switched strategy.

Android's dominance doesn't necessarily mean that all Android smartphone-makers are doing well though: Gartner said that profitability remains a challenge for many Android vendors, which means that new ways of making money are required. It's also a crowded market, so Nokia's return to the smartphone/tablet arena will be no easy mission.

gartnerchart2.png

"Making good hardware won't be an issue for Nokia, but users need a compelling reason to remain loyal to the same brand. Furthermore, that the smartphone market is slowing down makes it difficult for mobile phone vendors to reach previous levels of growth. New company HMD is entering the market at a less prosperous time, making it even more difficult for the vendor to do well in the short term," said Gupta.

Read more about smartphone sales