Worldwide sales of smartphones recorded the first-ever decline in Q4 of 2017

According to the new report by research firm Gartner, global sales of smartphones to end users totaled nearly 408 million units in the fourth quarter of 2017, a 5.6 percent decline over the fourth quarter of 2016, and this is the first year-on-year decline since Gartner started tracking the global smartphone market in 2004.

"Two main factors led to the fall in the fourth quarter of 2017," said Anshul Gupta, research director at Gartner.

"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," Gupta said.

Meanwhile report pointed out Samsung saw a year-on-year unit decline of 3.6 percent in the fourth quarter of 2017, but this did not prevent it from defending its No. 1 global smartphone vendor position against Apple.

Despite the start of a slowdown in sales of Samsung's Galaxy S8 and S8+, the overall success of those models has helped Samsung improve overall average selling price. Samsung is poised to announce the successors to its Galaxy series of smartphones at Mobile World Congress (MWC) this year and the launches of its next flagship devices are likely to boost Samsung's smartphone sales in the first quarter of 2018.

While Apple's market share stabilized in the fourth quarter of 2017 compared to the same quarter in 2016, iPhone sales fell 5 percent. "Apple was in a different position this quarter than it was 12 months before," said Gupta.

"It had three new smartphones - 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," added Gupta.

The report said that Huawei and Xiaomi were the only smartphone vendors to achieve year-on-year unit growth (7.6 and 79 percent, respectively) and grew market share in the quarter. With Huawei's new smartphone additions in the quarter, including Mate 10 Lite, Honor 6C Pro and Enjoy 7S, the vendor broadened the appeal of its smartphones.

Xiaomi's competitive smartphone portfolio, consisting of its Mi and Redmi models, helped accelerate its growth in the emerging Asia/Pacific (APAC) market. It also helped Xiaomi win back lost share in China.

"Future growth opportunities for Huawei will reside in winning market share in emerging APAC and the US," Gupta further added.

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"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, " Gupta said.