Global sales of smartphones to end users totalled nearly 408 million units in the fourth quarter of 2017, a 5.6% decline over the fourth quarter of 2016, according to Gartner.
This marks the first year-on-year decline since Gartner started tracking the global smartphone market in 2004.
Gartner research director Anshul Gupta says "Two main factors led to the fall in the fourth quarter of 2017.
"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."
Samsung retained its position as the No. 1 global smartphone vendor, despite a year-on-year unit decline of 3.6% in the fourth quarter of 2017.
Apple is in second place, with sales figures of 73,175.2 in Q417, compared to 77,038.9 in Q416.
Huawei and Xiaomi were the only vendors in the top five to experience growth in the fourth quarter (7.6 and 79%, respectively).
According to Gartner, the overall success of Samsung’s Galaxy S8 and S8+ models have helped improve the company’s overall average selling price, despite a sales slowdown in Q4.
The analyst says the company are likely to experience a sales boost in Q1 2018, with the next Galaxy models expected to be announced at the Mobile World Congress in Barcelona.
While Apple's market share stabilised in the fourth quarter of 2017 compared to the same quarter in 2016, iPhone sales fell 5%.
Gupta adds, “(Apple) had three new smartphones (in Q4) — the iPhone 8, iPhone 8 Plus and iPhone X — yet its performance in the quarter was overshadowed by two factors.
“First, the later availability of the iPhone X led to slow upgrades to iPhone 8 and 8 Plus, as users waited to try the more-expensive model.
“Second, component shortages and manufacturing capacity constraints preceded a long delivery cycle for the iPhone X, which returned to normal by early December 2017. We expect good demand for the iPhone X to likely bring a delayed sales boost for Apple in the first quarter of 2018," he says.
Gartner says that Huawei and Xiaomi are, overall, the big winners for Q4.
However, Gupta says there are differing growth priorities for the two companies.
"Future growth opportunities for Huawei will reside in winning market share in emerging APAC and the U.S.," Gupta says.
"Xiaomi's biggest market outside China is India, where it will continue to see high growth. Increasing sales in Indonesia and other markets in emerging APAC will position Xiaomi as a strong global brand.”
In 2017 as a whole, smartphone sales to end users totalled over 1.5 billion units, an increase of 2.7% from 2016.
The Android platform continues to dominate sales by operating system, with 1,320,118.1 units sold in 2017 (representing 85.9% market share), while second-placed Apple sold 214,924.4 units in 2017 (14% market share).