While smartphone sales continue to rise across the globe, China has recorded its first drop in purchases of the devices.
According to analysts Gartner, global smartphone sales for the second quarter of this year reached 330 million, up 13.5 percent on a year ago. However, China saw sales fall by four percent over the same period.
"China has reached saturation -- its phone market is essentially driven by replacement, with fewer first-time buyers," Anshul Gupta, reseach director at Gartner said.
With China the biggest smartphone market globally, the fall in smartphone purchasing in the country has had a noticeable knock on effect, slowing the worldwide growth rate for smartphone sales. Overall, sales growth fell to its lowest level for two years.
Smartphone makers' market shares are also suffering a shakeup: while Samsung remains the biggest player with over 21 percent share, down over four percentage points over the last year. Those benefitting from Samung's struggles are Apple, whose share is up two percentage points to 14.6 percent as buyers opted for large screen iPhones rather than Samsung phablets. Huawei also managed a gain of around two percent: the third placed manufacturer now has 7.8 percent of the smartphone market.
"Apple's double-digit growth in the high-end segment continued to negatively impact its rivals' premium phone sales and profit margins. Many vendors had to realign their portfolios to remain competitive in the midrange and low-end smartphone segments. This realignment resulted in price wars and discounting to clear up inventory for new devices planned for the second half of 2015," Gartner said.
It was a similar share in the mobile market as a whole, which counts both smart and feature phones.
Of the 446 million mobiles sold in the second quarter, 19.9 percent went to Samsung (down two percentage points), and 10.8 percent to Apple (up 2.8 percentage points).
Unlike in the smartphone market, Huawei took fourth place, ceding the bronze position to Microsoft. After buying Nokia's devices and services unit, Microsoft has inherited the Finnish company's significant feature phone business. During the third quarter, Microsoft held 6.2 percent of the market, narrowly ahead of Huawei's 5.9 percent. However, that's a 3.3 percentage point decline over last year.
After struggling to generate much momentum in the mobile market since its Nokia acquisition, Microsoft CEO Satyda Nadella earlier this year announced the company would be stepping back from smartphones.
"In light of Microsoft's recent cuts in its mobile hardware business, we'll await signs of its long-term commitment in the smartphone market," Gupta said.