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Smartphone sales suffer first ever decline: Gartner

The fourth quarter of 2017 marks the first year-on-year decline in sales in the smartphone market.

Smartphones sales have declined for the first time year-on-year worldwide since 2004.

According to research firm Gartner, the global sales of smartphones to end users totaled roughly 408 million units in Q4 2017, a 5.6 percent decline over Q4 2016. This is the first yearly decline recorded since the agency began tracking the marketplace in 2004.

In 2017 as a whole, smartphone sales worldwide pushed through the 1.5 billion mark, an increase of 2.7 percent from 2016.

While sales may be sliding, potentially due to the longevity of our devices, a congested marketplace, and the additional investment required for high-end handsets, Samsung has managed to keep a tight grip on the top spot.

The South Korean tech giant experienced a year-on-year decline of 3.6 percent, while rival Apple also felt a downturn in iPhone sales of roughly five percent.

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Gartner expects that Samsung, despite a downturn in sales, will likely experience an increase in sales should the firm announce flagship devices and successors to the Samsung Galaxy S8 range at Mobile World Congress this year.

"Although Samsung's significant sales volumes lean toward mid-price and entry-level models, which now face extreme competition and reducing contribution, its profit, and average selling price may further improve if these next flagship smartphones are successful," Gartner added.

Huawei and Xiaomi were the only smartphone vendors which enjoyed growth year-on-year at 7.6 percent and 79 percent, respectively.

Huawei has launched a selection of new smartphones over the past year in different pricing brackets and Xiaomi is becoming an increasingly competitive force in the market due to a focus on affordable low and mid-range handsets.

This has prompted growth in the Asia/Pacific (APAC) region, and in particular, China, Indonesia, and India are prompting accelerated sales.

The combined market share of Chinese vendors has increased by 4.2 percent, while Samsung and Apple's market share as the top companies is unchanged.

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Google's Android operating system has captured 86 percent of the market, according to the research firm, which is an increase of 1.1 percent year-on-year.

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"Two main factors led to the fall in the fourth quarter of 2017," said Anshul Gupta, research director at Gartner. "First, upgrades from feature phones to smartphones have slowed down due to a lack of quality "ultra-low-cost" smartphones and users preferring to buy quality feature phones. Second, replacement smartphone users are choosing quality models and keeping them longer, lengthening the replacement cycle of smartphones."

"Moreover, while demand for high quality, 4G connectivity, and better camera features remained strong, high expectations and few incremental benefits during replacement weakened smartphone sales," the analyst added.

See also: Apple, Samsung, Google top the IT vendor ranks: Gartner

In January, Gartner said that global technology spending will reach $3.7 trillion in 2018, an increase of 4.5 percent from 2017. The Internet of Things (IoT), artificial intelligence (AI), and blockchain technologies are expected to be driving factors for growth.

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