5G Picks up Pace in Canada in Q3; Smartphone Installed Base Crosses Half Million in Oct

Toronto, Los Angeles, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – November 24, 2020

Smartphone sales in Canada inclined 13% YoY in Q3 2020, according to Counterpoint’s North America Monthly Channel Share Tracker service. Apple and Samsung together accounted for 86% of the total sales compared to 82% during Q3 2019. In volume terms, Apple inclined 7% YoY despite the new iPhone sales being pushed to October, while Samsung inclined 21% YoY.

Senior Analyst Hanish Bhatia said, “Smartphone demand rebounded in Q3 2020 driven by pent-up consumer demand and solid uptake of back-to-school promotions. Retail activity picked up as consumers were now more confident about going outdoors. Online sales also remained strong with some consumers opting for store pick-up options. This trend is likely to continue as carriers push for a healthy mix of digital sales and brick-and-mortar sales. The market witnessed strong competition among carriers to gain share, especially among flanker brands. Customer churn remained comparable to 2019.”

Speaking on Canada’s 5G ecosystem, Bhatia said, “5G remained in focus as carriers shifted their marketing efforts to get an early lead among premium early adopters ahead of the Apple launch event. The number of 5G models has gone up from 3 in March 2020 to 14 in November 2020 after the recent Apple launch. As of October 2020, Canada had added more than half a million 5G devices to its networks. Most of the 5G device sales are restricted to the premium price bands, while average 5G device costs continue to decline in the US and other countries with 5G networks.”

Commenting on 5G opportunity, Research Director Jeff Fieldhack said, “Rogers leads the market in terms of 5G deployment, with active networks across 130 metros. With the most extensive network rollout and the largest Apple installed base, Rogers

is in a good position for a strong 5G upgrade cycle during the fourth quarter. Bell and Telus also launched 5G network services at the end of Q2 2020 and continue to ramp up across Canada. Carriers are now more than prepared for a strong quarter, but another COVID-19 wave can play a spoiler with diminished consumer purchases. 5G in Canada is still in the early stages of deployment with carriers leveraging the existing spectrum assets for the initial 5G push. The sweet spot for 5G performance and coverage will be the 3.5GHz spectrum, and auctions for this spectrum will not be before June 2021. The carriers could take another year after the auctions to start using this spectrum.”

On OEM performances, Fieldhack added, “Apple remained resilient and maintained its lead over other brands. Supply constraints seen in Q2 2020 eased in Q3 2020. We see less display devices on retail shelves to protect against COVID-19 spread, especially in case of new iPhone 12 series. Samsung did well on a YoY basis driven by demand for the new Note 20 series and Galaxy A51 and A71 devices. The LG Velvet remained in focus for the mid-range 5G value consumers. Motorola registered strong growth on a YoY basis after facing supply issues during the last quarter.”

Commenting on the Canadian market outlook, Research Analyst Maurice Klaehne said, “We can expect a strong upgrade cycle as we enter the promotional period during Q4 2020 – Black Friday followed by Boxing Day. We are already seeing a great response towards the new iPhone devices, especially the iPhone 12 variant. However, COVID-19 has negatively impacted small businesses. Besides, this growth will be slightly offset by less immigration activity and fewer student purchases in Canada during the fourth quarter.”

Key Highlights:

  • Apple captured six spots in the top 10 best-selling devices during the quarter. The Apple iPhone 11 continues to be the best-selling smartphone for the fourth consecutive quarter.
  • Samsung captured the remaining four spots in the top 10 list. The Samsung Galaxy S10 series continues to do well along with the A51 and Galaxy S20 series devices. The new Galaxy S20 FE has also registered strong consumer response which will be of help during the fourth quarter.
  • LG registered single digit YoY growth with the help of the 5G LG Velvet and other K series models – K61 and K41S – in budget price tiers.
  • Google has been able to gain some momentum. Pixel 4A promotions were stronger than expected, but the marketing efforts shifted towards the newer Pixel devices such as the Pixel 5. The new Pixel 5 is already available at heavily discounted prices in early Black Friday deals.
  • Motorola has been able to gain share in budget category devices. The Moto E particularly did well among entry-level devices.

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