Apple’s new iPhones landed with a thud during the holiday season—and new market research numbers show the sales decline was historically bad.
Apple (ticker: AAPL) recorded an 11.8% decline in iPhone sales in the fourth quarter, the biggest percentage drop since the first quarter of 2016, according to a Gartner report released Thursday. Top seller Samsung Electronics (South Korea: 005930) also experienced a dip in a flat market, while low-cost Chinese vendors Huawei and OPPO made huge strides.
Worldwide smartphone sales to consumers inched up 0.1% year-over-year to 408.4 million units in the fourth quarter.
Entry-level and midprice smartphones are selling briskly, but demand for high-end smartphones like iPhone and some Samsung models continued to stall, Tuong Nguyen, senior principal analyst at Gartner, told Barron’s. At the same time, incremental innovation, coupled with price increases, slowed replacement decisions for high-end smartphones, he said.
Apple sold 64.53 million units in the fourth quarter, or 15.8% of the market, compared with 73.18 million, or 17.9% of the market, in the same quarter a year earlier. (Apple shares were down 0.4% to $171.38 per share on Thursday.) The company didn’t immediately respond to a request for comment.
Samsung maintained its top spot, but sold fewer units, 70.78 million, for a smaller share of the market, 17.3%, than a year ago.
Huawei was the big winner for sales growth, as it has been the past few quarters, with sales of 60.41 million units, or 14.8% of the market, compared with 43.89 million, or 10.8% of the market, a year ago. Like other Chinese vendors, most of its growth came within the region—the world’s biggest market for smartphones.
With the largest smartphone conference, Mobile World Congress, scheduled to start Monday in Barcelona, several vendors—led by Samsung—are taking increasingly radical steps to roust the market.
On Wednesday, Samsung announced a $1,980 foldable phone, called Galaxy Fold, along with its latest flagship models, Galaxy S10 and Galaxy S10+. The Fold is expected to be the first of several bendable phones from leading smartphone makers in an attempt to get consumers to pay more for multiple-screen devices that act as phones, tablets, and cameras.
Apple is expected to be one of those players eventually, based on a recent patent it updated for such a device.
The company, which rode more than a decade of surging iPhone sales to become the first to eclipse $1 trillion in market value, has stopped reporting iPhone shipments as its sales have cooled in recent quarters.
December quarter iPhone sales plunged 15% to $51.98 billion year-over-year, Apple reported last month. Sales of its flagship product in China plunged 20% during the calendar fourth quarter, falling twice as much as the slumping Chinese smartphone market’s sales overall, according to an IDC market research report.
In early January, Apple Chief Executive Tim Cook issued a rare warning about lower-than-expected revenue for its December quarter. Analysts and investors keenly dissect iPhone results because the smartphone segment represents over 60% of Apple’s total revenue.
Write to Jon Swartz at jonathan.swartz@dowjones.com
