Apple (NASDAQ:AAPL) saw iPhone units jump an estimated 8% to 69.55 million in the fourth quarter, according to recent figures from market researcher Gartner. That parallels the 8% increase in iPhone revenue that Apple reported in January, which suggests that average selling prices (ASPs) were relatively flat. The broader smartphone market continues to mature, with most of the top vendors seeing unit volumes decline: Worldwide shipments dipped modestly to 406.6 million in the final quarter of 2019.

With Apple no longer disclosing unit volumes directly, investors have to rely on third-party guesses.

Six iPhone 11 handsets getting splashed with water

Image source: Apple.

Returning to iPhone growth

For the full year, smartphone unit sales declined by 1%, with India overtaking the U.S. to become the second-largest smartphone market in the world behind China. Apple is finally preparing to start direct online sales in India later this year, with the first Apple retail store set to open in 2021, CEO Tim Cook confirmed at the company's annual shareholder meeting last month.

Among the top five smartphone players, only Apple and China's Xiaomi (OTC:XIACY) were able to report growth, while the other three companies saw volumes fall.

Vendor

Q4 2019 Units

Q4 2019 Market Share

Growth

Samsung

70.4 million

17.3%

(0.5%)

Apple

69.55 million

17.1%

7.8%

Huawei

58.3 million

14.3%

(3.5%)

Xiaomi

32.45 million

8%

16.5%

OPPO

30.45 million

7.5%

(3.5%)

Others

145.5 million

35.8%

(5.1%)

Total

406.6 million

100%

(0.4%)

Data source: Gartner.

Apple's iPhone business had suffered four consecutive quarters of declining volumes, but the company's efforts to make its smartphone more affordable have helped spur demand. The Cupertino tech giant enjoyed especially strong demand in China, as well as in certain developed markets in Western Europe and emerging markets like Brazil and India, Gartner said.

"A slight lowering of the prices of the iPhone 11 series, compared with the iPhone XR, and other price reductions for previous-generation iPhone models, increased demand," according to Gartner research vice president Annette Zimmermann. "It also helped Apple regain the No. 2 position."

Chart showing iPhone revenue growth

Data source: SEC filings. Chart by author. Calendar quarters shown.

Xiaomi has started to head the other way with pricing, boosting prices in an effort to expand margins. The company's rise to prominence was driven by selling extremely affordable handsets with competitive specs typically found in more expensive devices. However, it's no surprise that Xiaomi is becoming more conscious of profitability following its IPO in 2018.

Enter the coronavirus

This was all before the coronavirus outbreak reached global scale in early 2020, threatening global economies and rattling investors. Apple has already acknowledged that it will miss its revenue guidance due to the epidemic, and other tech companies have followed suit in issuing their own warnings. The Mac maker noted that the coronavirus was impacting demand in China while simultaneously disrupting iPhone production.

Zimmermann added, "Looking forward, while the COVID-19 outbreak will impact smartphone demand negatively in China in the first quarter of 2020, we do not expect a demand contraction in the international smartphone market during that period."