FRAMINGHAM, MA – Smartphone vendors shipped a total of 375.4 million units during the fourth quarter, down 4.9% year-over-year.

It was the fifth consecutive quarter of decline, said IDC.

The holiday quarter closed out the worst year ever for smartphone shipments, with global smartphone volumes declining 4.1% in 2018 to 1.4 billion units shipped. With challenging market conditions continuing into the first quarter of 2019, the likelihood of a declining market this year becomes more of a reality.

"Globally the smartphone market is a mess right now," said Ryan Reith, program vice president, IDC Worldwide Mobile Device Trackers. "Outside of a handful of high-growth markets like India, Indonesia, Korea, and Vietnam, we did not see a lot of positive activity in 2018. We believe several factors are at play here, including lengthening replacement cycles, increasing penetration levels in many large markets, political and economic uncertainty, and growing consumer frustration around continuously rising price points."

Despite all the challenges the smartphone market is facing, the largest focal point remains the China market as recovery continues to get pushed further forward. China, which accounts for roughly 30% of the world's smartphone consumption, had an even worse 2018 than the previous year with volumes down just over 10%. High inventory continues to be a challenge across the market as is consumer spending on devices, which has been down overall. At the same time the top four brands, all of which are Chinese – Huawei, Oppo, Vivo and Xiaomi – grew their share of the China market to roughly 78%, up from 66% in 2017.

On a worldwide basis, the top five smartphone companies continue to get stronger and now account for 69% of smartphone volume, up from 63% a year ago. If No. 6 Vivo is included,, the share of the top companies is 75% and growing. While the market faces some very serious challenges in general, none are greater than the challenges facing the brands that continue to lose market share and channel positioning.

"With replacement rates continuing to slow across numerous markets, vendors will need to find a new equilibrium that balances the latest smartphone features, compelling design, and affordability," said Anthony Scarsella, research manager, IDC. "The arrival of both 5G and foldable devices later this year could bring new life to the industry depending on how vendors and carriers market the real-life benefits of these technologies. However, we expect these new devices to elevate average selling prices as new displays, chipsets, and radios will bring an increased price to the bill of materials, which will translate to higher price points for consumers. To combat this, carriers and retailers will need to fully maximize trade-in offers for older devices as a type of subsidy to push upgrades throughout 2019."

Samsung saw volumes decline 5.5% with total shipments of 70.4 million units. Share fell to 18.7%, a few points above Apple and Huawei. Full year 2018 volumes were down 8% to 292.3 million. Apple saw volumes drop 11.5% the quarter and 3.2% for the year.

Huawei's quarterly volumes rose 43.9%, bringing up 2018 volumes 33.6%. China represents about half of Huawei's smartphone business, but that is dropping as the company continues its international success with growth in almost every international market where they participated in 2018.

Oppo had full-year shipments of 113.1 million, up 1.3%. Xiaomi's full-year shipments rose 32.2%, passing the 100 million market.