Xiaomi reported the strongest growth in three years in Q1, 2018 ahead of IPO filing, according to Canalys. The company, which is among the top 10 smartphone vendors globally is up 116 per cent in the first quarter. Samsung replaced Apple to take the top spot once again, while Apple took the second place. Apple was followed by Chinese vendors Huawei, Xiaomi and Oppo at the third, fourth and fifth positions respectively. Apple iPhone shipments grew 3 per cent year on year and the company maintained its shipment strength in the US and China, which are its key markets. Shipments in China, however, were down to 0.6 per cent annually with 9.3 million units shipped. In the US, Apple iPhone shipments were up 8 per cent year on year at 16.7 million.
“Xiaomi has done a great job recovering its position in its home market,” Canalys Senior Director Nicole Peng said in a statement. “While China has been a growth engine and profit driver for Xiaomi’s rising service revenue, overseas market expansion has helped it boost market share, both of which will be critical to the success of its IPO.” Of Xiaomi’s 28.1 million shipments in Q1, close to 57% shipped outside of China. “It is important to note that Xiaomi’s rapid expansion will bring with it substantial overheads, which will make sustaining its original lightweight cost structure increasingly difficult.” Peng added.
The worldwide smartphone shipments were down 3.4 per cent in the first quarter of 2018, when compared to the same period in 2017 at 337 million units. The Canalys report attributes a weak Q1, 2018 to 21 per cent year-on-year decline in China, which is the world’s biggest market. “There have been no signs of recovery since the market started to decline in Q4 last year. The high level of pessimism about China’s smartphone market and its impact beyond China is concerning,” said Rushabh Doshi, Research Manager at Canalys in a press statement.
In highly saturated markets, such as the US, China and Western Europe, a lack of innovation has led to a lack of consumer demand, and growth will be hard to find in 2018. On the other hand, in high-growth markets, such as India and Brazil, vendors are struggling with low margins. It is not surprising to see top vendors growing share at the expense of smaller vendors as the market slows and survival gets tougher,” Doshi explained.