Gartner: Apple shows strength in China, but overall smartphone growth weakened in Q2

Smartphone sales growth was its weakest in the second quarter since 2013, according to research firm Gartner. That's mainly due to the first-ever slowdown in the Chinese market, the world's largest for smartphones, and while Apple (NASDAQ: AAPL) had a strong quarter in China, OEMs that rely on Google's (NASDAQ: GOOG) Android software saw their fortunes slide, and Android overall recorded its weakest growth ever in the quarter, Gartner said.

Gartner said worldwide smartphone sales posted the slowest growth rate since 2013, as sales of smartphones to end users in the second quarter totaled 330 million units, an increase of 13.5 percent year-over-year.

"While demand for lower-cost 3G and 4G smartphones continued to drive growth in emerging markets, overall smartphone sales remained mixed region by region in the second quarter of 2015," Gartner analyst Anshul Gupta said in a statement. The regions that saw the fastest growth rates in smartphone sales were emerging Asia-Pacific markets (excluding China), Eastern Europe and Middle East and Africa, driven by good performance from Chinese and local vendors.

Gartner said smartphone sales in China fell for the first time year-over-year, recording a 4 percent decline. 

"China is the biggest country for smartphone sales, representing 30 percent of total sales of smartphones in the second quarter of 2015. Its poor performance negatively affected the performance of the mobile phone market in the second quarter," Gupta said.

According to Gupta, the Chinese smartphone market has reached saturation and is now a market where smartphone sales are driven by replacements, with fewer first-time buyers. "Beyond the lower-end phone segment, the appeal of premium smartphones will be key for vendors to attract upgrades and to maintain or grow their market share in China," Gupta added.

Apple said iPhone unit sales in China grew 87 percent year-over-year -- though Gartner said total iPhone sales in China to end users grew 68 percent to 11.9 million units. Apple has shown continued strength of its large-screened iPhones, especially in China. Huawei also performed well in China, Gartner said, but many other smartphone makers, including Samsung Electronics, Lenovo, LG Electronics and others faced headwinds in the quarter. Analysts have been worried about what effect a slowing Chinese economy will have for Apple as well as other smartphone and electronics makers. Either way, more ferment is ahead, according to Gartner.

"The low barrier to entry into the Android segment will continue to encourage an array of new players, adding to further disruptions coming from Chinese manufacturing and innovative Internet players with new business models that are not reliant on hardware margins," Gupta said.

Even though Android led the global smartphone market by capturing 82.2 percent of the market in the second quarter, Gartner said Android's global share was affected by the weak performance of China and the strong performance there by Apple, which has taken share from Android for the last three quarters.

"Android saw its lowest year-over-year growth of 11 percent with share reaching 82.2 percent in the second quarter of 2015," Gupta said.

For more:
- see this Gartner release
- see this TechCrunch article
- see this Reuters article

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