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Apple Loses #2 Spot to Huawei as Q2 Smartphone Shipments Dip

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Huawei toppled Apple (AAPL - Free Report) to become the second largest smartphone seller in terms of shipment, per latest data from research firm Gartner, which was quoted by TechCrunch.

South Korean handset maker Samsung retained its top-ranking in second-quarter 2018.

Huawei’s market share surged 350 basis points (bps) to 13.3%, while Apple’s contracted 30 bps from the year-ago quarter to 11.9%.

Huawei’s smartphone sales grew 38.6% year over year, driven by strong demand for Honor sub-brand, which is available in 70 markets. However, Apple’s shipment growth suffered from subdued demand for iPhone X and sluggishness in iPhone 8 sales.

Further, Samsung’s market share contracted 330 bps, primarily due to stiff competition from Chinese vendors in the second quarter.

Per Gartner, overall smartphone sales increased 2% to 374 million in second-quarter 2018.

Apple’s Upcoming iPhone Launch to Boost Growth

Apple is now rumored to launch three iPhone models in 2018. Per TechCrunch, which quoted a Bloomberg report, the company is anticipated to launch an updated iPhone X, a bigger iPhone and an iPhone 8 that will feature iPhone X design.


It is highly anticipated that the updated iPhone X will be powered by Apple’s latest A12 chip with a 5.8-inch OLED screen. The bigger phone is expected to have a 6.5-inch display along with stainless steel edges, two cameras on the back and an OLED display.

The iPhone X inspired iPhone 8 is expected to be the cheaper version this season. The device is likely to have aluminium edges instead of stainless steel edges as found in iPhone X. Moreover, it is anticipated to have a single camera on the back and a 6.1-inch LCD display.

The three new devices promise strong growth prospect for Apple, prior to the upcoming holiday season. Moreover, the company’s focus on selling more iPhones at a higher ASP is expected to drive the top line, going forward.

Android Dominates OS Market, iOS Expands Ecosystem

Alphabet’s (GOOGL - Free Report) Android operating system continued to dominate the worldwide smartphone sales to end-users by operating in the second quarter. Android’s market share increased 20 bps from the year-ago quarter to 88%. However, Apple’s iOS market share decreased 20 bps to 11.9% in the second quarter.

Nevertheless, Apple’s upcoming new versions of operating system software for iOS, Mac and Watch are expected to drive user base. The new version of iOS will speed up older phones.

At its Worldwide Developers Conference (WWDC), Apple stated that “apps will open up to 40% faster, the onscreen keyboard will appear up to 50% faster and the camera app will open up to 70% faster” in iOS 12.

Apple is also likely to bring a premium version of AirPods, new HomePods, wireless charging case AirPower and over-ear headphones as early as 2019, reports Bloomberg. The launch of new features is expected to help Apple retain its users.

However, delay in the release of the group FaceTime feature announced at WWDC may now cost Apple in terms of competitive prowess, as the group video chat space is overcrowded.

The field is currently dominated by the likes of Facebook (FB - Free Report) owned WhatsApp and its Messenger app, Microsoft’s (MSFT - Free Report) Skype and Google Hangout services.

Currently, Apple has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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