"India overtook the US this quarter to be the second largest market, though both countries were hit by weaker seasonal performance compared with last year," it said.
Worldwide smartphone shipments fell by 7.2 per cent year-on-year to 348.9 million units during July-September 2018, a fourth consecutive quarter of decline, Canalys said.
"This was also the worst third quarter performance since 2015...Seven of the top 10 markets recorded year-on-year declines, caused by lengthening smartphone replacement cycles, worsening international trading conditions and competition from major Chinese vendors," it added.
The three markets (among the top 10) that registered growth were Indonesia (13.2 per cent increase y-o-y to 8.9 million units), Russia (11.5 per cent jump y-o-y to 8.8 million units), and Germany (2.4 per cent rise y-o-y to 5.5 million units).
China's smartphone shipment declined 15.2 per cent y-o-y, India by 1.1 per cent and the US by 0.4 per cent in the September 2018 quarter.
Samsung led the vendor tally with 20.4 per cent share in the said quarter, followed by Huawei (14.9 per cent), Apple (13.4 per cent), Xiaomi (9.6 per cent), and Oppo (8.9 per cent).
"The worldwide smartphone market faces an unprecedented challenge, while its dynamics are changing rapidly at both the vendor and country level. This is providing growth opportunities for aggressive vendors with the speed to respond quickly to market changes," Canalys Research Manager Rushabh Doshi said.