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MWC: smartphone sales pass half-trillion

On the eve of Mobile World Congress, new data shows handsets generated $522bn revenue in 2018.

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Claiming a 44 percent share smartphones, mobile phones and wearables are still the powerhouse in the $1.2 trillion technical consumer goods (TCG) market. Although global smartphone demand declined three percent in 2018 to 1.44 billion, sales remain strong and reached $522 billion. These are GfK’s findings are released to coincide with Mobile World Congress 2019 in Barcelona.  

Global smartphone sales remained strong in 2018 as the premium trend continues to fuel growth. In figures, this equates to an increase of five percent ($522 billion). However, the demand for smartphones in 2018 declined by three percent to 1.44 billion units sold worldwide versus 2017. Smartphones represent the majority of the total spend on the global TCG market last year. This is expected to grow plus one percent in 2019. 

The figures for Q4 2018 reveal a similar trend. Around 375 million smartphones (down seven percent) were sold worldwide year-on-year with a sales value of $144 billion.  

While premium continues to fuel growth, dearth of appealing innovation continued 

Around twelve percent (up from nine percent in 2017) of smartphones sold were priced at more than $800 in 2018. The mid-segment of $150-400 continues to be an important competitive battleground accounting for 46 percent of smartphones sold globally in 2018 (up two percent from 44 percent in 2017). 

Although a somewhat tough comparison with a strong Q4 2017, from October to December 2018, the dearth of appealing innovation continued prolonging replacement cycles and putting average selling price (ASP) under pressure. As a result, ASP declined two percent to an average of $384. 

Technological convergence enabling richer experiences 

GfK’s Consumer Life Study shows that consumer trends are changing when it comes to possessions. Not only do they “prefer to own fewer but higher quality items” that they will pay premium prices for, but they “value experiences more than possessions”. Whether it is memory size, larger screen size or a multiple high megapixel camera this innovation does not ignite consumers’ imagination and stimulate demand. 

Igor Richter, GfK’s Telecommunication expert says: “Our research shows that although the new features in smartphones have comparable performance features and computing power with laptops, these high-end specs still need to be converted into new experiences. High-end gaming has been reigned by the PC industry and is currently a major growth driver there. However, there is an untapped potential for more demanding gaming on the smartphone. Despite the relatively small smartphone screens compared with PC’s, their fast chipsets, sharp displays and increased battery capacity makes these gaming smartphones ideal handsets to deliver the processing power hungry gaming experience on the go. This explains why 55 percent of smartphone users worldwide played games on their smartphone in the last 30 days.”  

Core wearables remained on a strong growth path in 2018, with year-on-year demand up 16 percent and sales value up 35 percent. Demand was driven by the rise of SIM-enabled smartwatches which represent the majority of sales value within the Core wearables category. SIM-enabled smartwatches accounted for 17 percent of the Core wearables sales value, up from eight percent in 2017. 

Demand in Central & Eastern Europe and Emerging Asia* is only partially offsetting the decline in China 

The Chinese market consumes the majority of the global smartphone production, as well as being the home of local brands that are becoming increasingly global. 40 percent of the Chinese brands’ smartphone production in 2018 was purchased outside of China, that is up from 31 percent in 2016. The recent decline of demand in China in Q4 2018 (minus 19 percent year-on-year) is by its weight (27 percent in sales value) having a significant impact on the global figures. The continued demand in Emerging Asia* (plus 13 percent year-on-year) and Central & Eastern Europe (plus three percent year-on-year) only partially offset the decline in China in Q4 2018. 

Click here to download the complete infographic in printable resolution.

*Countries included in Emerging Asia in this release:  

Developed Asia: Australia, Hong Kong, Japan, New Zealand, Singapore, South Korea, and Taiwan.

Emerging Asia: Bangladesh, India, Indonesia, Cambodia, Malaysia, Myanmar, Philippines, Thailand, and Vietnam.

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Hearables are the new wearables

Earworn devices were among the fastest growing categories of wearable in the last quarter, capturing almost half of the market

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Global wearable device shipments grew 85.2% in the second quarter of 2019 (2Q19) as shipments totaled 67.7 million units according to new data from the International Data Corporation (IDCWorldwide Quarterly Wearable Device Tracker. Earworn devices (hearables) were among the fastest growing categories, capturing 46.9% of the overall wearables market during the quarter, up from 24.8% a year ago. Driving that growth was a slew of new products and consumers who purchased their second wearable, a hearable, to use in parallel with existing watches or wrist bands.

“The growing popularity of the hearables segment is forcing existing brands to reconsider past designs when launching new products, as evident in Samsung’s popular Galaxy Buds, while also attracting new brands to market,” said Jitesh Ubrani research manager for IDC Mobile Device Trackers. “And though it’s still early days, the market is showing signs of emerging subsegments such as hearables dedicated to sports from the likes of Jabra, premium hearables from companies such as Bose, and ones dedicated to hearing loss such as those from Nuheara.”

“What has been driving the hearables market is the experience,” says Ramon T. Llamas, research director, Wearables. “Quality audio is still the hallmark of hearables, but additional features – ranging from adjusting audio to smart assistants and health and fitness – increase their value and utility. As prices come down and more features come on board, this next generation of hearables will become the new normal for earphones.”

Hearable Company Highlights 

Apple led the market for hearables by capturing 50.2% share during the quarter. New products such as the refreshed AirPods and the latest from the Beats lineup helped the company grow 218.2% compared to last year. With the iPhone business facing challenges, Apple’s wearables business, particularly the popularity of the AirPods, is helping the company once again become the de facto standard though this time it’s for hearables.

Samsung, thanks to its self-branded devices and the JBL brand, captured the second position during the quarter. The highly publicized Galaxy Buds were one of the company’s most popular pair of hearables as the pair was bundled with the purchase of Samsung’s latest smartphone. Additionally, the JBL Tune 500BT managed to capture a large share as the low price and wide availability helped move a lot of volume.

Xiaomi’s AirDots (amongst other models) helped the company capture the third position. Though the company primarily sells its hearables in China, Xiaomi has already started to make inroads in other markets such as Europe and the Middle East with its smartphones and wrist bands. IDC expects Xiaomi to follow suit with its hearables.

Bose, a company with a long history of headphones and other audio products, ranked fourth in this market. The company’s long lineage in audio and premium offering has helped set the company apart from the remainder of the pack. The QC35ii and the SoundSport Free were two of its most popular products during the quarter. The latest Headphones 700 and upcoming Earbuds 500 should help the company maintain momentum in the upcoming quarters.

ReSound, the parent company of Jabra, rounded out the top 5 with 5.1% share and 132.9% growth. Jabra’s Elite Active 65t have been extremely popular as an alternative to Apple’s AirPods and have also been promoted heavily on Amazon’s store, allowing the company to pitch itself as a strong consumer brand in addition to its preexisting headset business that is targeted at office workers. At IFA 2019, Jabra announced the next version of the Elite Active series, which helps modernize the hearables and should provide healthy competition for others on the list.

Top 5 Wearable Companies, Hearable Devices only, by Shipment Volume, Market Share, and Year-Over-Year Growth, Q2 2019 (shipments in millions)

Company2Q19 
Shipments
2Q19 Market 
Share
2Q18 
Shipments
2Q18 Market 
Share
Year-over- 
Year Growth
1. Apple15.950.2%5.055.2%218.2%
2. Samsung3.310.2%0.910.2%252.1%
3. Xiaomi2.16.5%0.32.8%714.8%
4. Bose1.85.7%0.55.1%288.1%
5. ReSound1.65.1%0.77.7%132.9%
Others7.122.3%1.719.0%310.5%
Total31.8100.0%9.1100.0%250.0%
Source: IDC Worldwide Quarterly Wearables Tracker, September 9, 2019

Note: IDC defines Earwear/Hearables as the wearables that hang on or plug into the ear. The device must operate wirelessly and provide stereo sound while also including at least one of the following features:

  • Track health/fitness (e.g., Samsung Gear IconX).
  • Modify audio, and not just noise reduction (e.g., Nuheara IQbuds).
  • Provide language translation on the device (e.g., Waverly Labs).
  • Enable smart assistants at the touch of a button or through hotword detection even if the assistant is running on another device such as a smartphone (e.g., Apple’s AirPods and Google’s Pixel Buds).

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Phishing attacks hook into iOS

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The number of phishing attacks targeting users of Mac computers, iOS-based mobile devices, and the associated web services ecosystem to lure them into fraudulent schemes has reached 1.6 million in the first half of 2019 (H1-19) – proving that the growing number of users of popular digital devices is clearly attracting more and more cybercriminals!

While the volume of malicious software threatening users of macOS and the iOS mobile platform is much lower than those threating users of Windows and Android platforms, when it comes to phishing – a platform agnostic cyberthreat – things are quite different. 

Phishing attacks rely on social engineering, which means most have nothing to do with software. In fact,  Kaspersky’s recent Threats to Mac Users research highlighted that the number of cases where users faced fraudulent web pages utilising the Apple brand, as a decoy, has increased significantly in the first six-months of the year, reaching 1.6 million. This figure is around 9% greater than attacks experienced during the whole of 2018, when Kaspersky security solutions prevented more than 1.49 million attempts to access Apple-themed phishing pages.

What’s more, some regions had more macOS users hit by phishing than others, for instance, Brazil leads this list with 30.9% of users attacked, followed by India with 22.1% – and while not as prominent as other regions (and in proportion to the number of Apple device users), South Africa still sits at 17.5%.

The research is based on threat statistics voluntarily shared by users of Kaspersky Security Network – a global cloud infrastructure designed for immediate response to emerging cyberthreats.

Among the most frequent fraud schemes are those designed to resemble the iCloud service interface, aimed at stealing credentials to Apple ID accounts. Links to such services usually come from spam emails posed as emails from technical support. They often threaten to block user accounts should they not click the link. 

Another widespread scheme is the use of scaremongering pages that try to convince the user that their computer is under serious security threat and it will only take a couple of clicks and a few dollars to solve those issues. 

“While technically these fraud schemes are nothing new, we believe they pose an even greater danger to Apple users than similar schemes against users of other platforms – such as Windows or Android. This is because the ecosystem around Macs and other Apple devices is generally considered a far safer environment. Therefore, users might be less cautious when they encounter fake websites. Meanwhile the successful theft of iCloud account credentials could lead to serious consequences – an iPhone or iPad could be remotely blocked or wiped by a malicious user, for example. We urge users of Apple devices to pay more attention to any emails they receive, especially those claiming to be from technical support and requesting the user’s details or asking the user to visit a link,” said Tatyana Sidorina, security researcher at Kaspersky.

In addition to a rise in phishing, thereport also revealed other types of threats to users of macOS-based devices. The results have demonstrated some relatively positive tendencies: the most common threats for Mac users proved not to be critically dangerous malware, like banking Trojans, but instead AdWare threats, which are not-necessarily fatal and defined as ‘potentially unwanted programs’. Most are threatening users by overloading their devices with unrequested advertisements, yet some of these programs might, in fact, turn out to be a disguise for more serious threats.

Other findings of the report include:

To keep your devices safe, Kaspersky recommends:

  • Keeping macOS and all your apps and programs up to date
  • Using only legitimate software, downloaded from official webpages or installed from the Mac App Store
  • Starting to use a reliable security solution like Kaspersky Internet Security that delivers advanced protection on Mac, as well as on PC and mobile devices.

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