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China Smartphone Market Declines 14% YoY in Q3 2020; Over 50% Smartphones Sold Were 5G Capable

  • Smartphone sales in China recovered slowly with 6% QoQ growth in Q3. But the growth was still down 14% YoY.
  • Xiaomi outperformed the market as the only major OEM to achieve a positive YoY growth in Q3 in China.
  • Huawei continued to lead the market with 45% share in Q3. However, its sales have started to decline.

 

Beijing, New Delhi, Hong Kong, Seoul, London, San Diego, Buenos Aires – October 29, 2020

Smartphone sales in China recovered slowly with 6% QoQ (quarter-on-quarter) growth in Q3 2020, according to Counterpoint’s Market Pulse – Monthly Smartphone Sales Tracking Service. However, the country’s smartphone market still saw 14% YoY (year-on-year) decline and it was yet to recover to the pre-COVID level.

Commenting on the overall Chinese smartphone market, Research Analyst Flora Tang said, “The COVID-19 pandemic has been effectively contained in mainland China with rare new cases reported locally in Q3. According to the National Bureau of Statistics of China, China’s economy grew by 4.9% in Q3, recovering from a contraction of 6.8% in Q1 and a mild growth of 3.2% in Q2. Nevertheless, the domestic consumption in China remained weak despite the sequential perk-up, along with a worse unemployment rate. The surveyed jobless rate in China’s urban areas in September was up by 0.2 percent point, in which the surveyed unemployment rate of college graduates aged between 20 and 24 was up by 4 percent points. During the post-pandemic recovery period in Q3, the overall market demand in China remained stagnant despite smartphone OEMs’ efforts to stimulate sales.”

Exhibit 1: YoY Growth of Overall Smartphone Sales volume in China

(Sept 2019 – Sept 2020)

Source: Monthly Smartphone Market Pulse, September 2020

Commenting on key vendors’ performances, Research Analyst Mengmeng Zhang said, “Huawei continued to lead the market with 45% share in the quarter. Various Huawei 5G smartphones, including the premium P40/P40 Pro 5G series, Mate 30 5G series and the affordable premium Nova 7 5G series, received positive market feedback to dominate China’s top 10 best-selling models list. However, attacked by the escalated US trade ban since mid-September, Huawei has suffered severe component shortage and its sales have started to decline.

The iPhone 11, grabbing near 5% market share, remained the best-selling smartphone model in China during the quarter. Nevertheless, the overall sales volume of Apple dropped 7% YoY, impacted by the deferred debut of the iPhone 12 series.

Xiaomi’s share increased to 11% in Q3, outperforming the market with 8% YoY growth in sales volume. Driven by the aggressive promotions during the OEM’s decennial celebrations in August, Xiaomi became the only major OEM that achieved positive YoY growth in Q3.

Sales of OPPO and vivo declined YoY but saw an increase from the last quarter, driven by the strong momentum of their new flagship series — the  OPPO Reno 4/4 Pro 5G and vivo X50/X50 Pro/X50 Pro Plus 5G. OPPO’s Reno 4/Reno 4 Pro 5G were the highlight, achieving 90% growth during the first quarter of sales compared to the predecessors (sales of the Reno 3/Reno 3 Pro 5G during Q1 2020). For this strong performance, the OPPO Reno 4 5G emerged to become the only 5G model apart from Huawei’s to be presented in China’s top-selling smartphone models list.”

Exhibit 2: Smartphone OEMs’ Sales Volume Market Share % in China, Q3 2020

Smartphone OEMs Sales Volume Market Share in China Q3 2020Source: Monthly Smartphone Market Pulse, September 2020

Note: Huawei includes HONOR, vivo includes IQOO, Xiaomi includes Redmi, OPPO doesn’t include realme

Exhibit 3: Ranking of Top-10 Best-selling Smartphone Models in China, Q3 2020

Source: Monthly Smartphone Market Pulse, September 2020

Discussing the 5G smartphone segment in China, Senior Analyst Ethan Qi said: “From the start of the second half this year, Chinese OEMs have been active in launching price-for-value 5G smartphones in the sub-$300 price band. Some popular models in this segment include the Huawei Enjoy 20 5G, HONOR X10 5G, OPPO A72 5G, vivo Y70S 5G and the Redmi 10X 5G. Aggressive players like realme released four budget 5G models during Q3, and further brought down the price threshold of 5G phones in China to about $150 with the realme V3 5G (starting price of the realme V3 5G is RMB999/$149).

Meanwhile, by the end of September, Chinese telecom operators had built 690,000 units of 5G base stations, fully covering the country’s prefecture-level cities, according to a release from the MIIT (Ministry of Industry and Information Technology). Stimulated by efforts from these industrial players, 5G smartphone sales in China continued to surge. In Q3, over 50% smartphones sold in China were 5G enabled, compared to 33% in Q2 and 16% in Q1. With the 5G iPhones lining up across channels in Q4, we expect this share to rise to near 70% by the end of 2020.”

You can also visit our Data Section (updated quarterly) to view the smartphone market share Globally and for the USChina and India.

Analyst Contacts:

Flora Tang

Mengmeng Zhang

Ethan Qi

Tarun Pathak

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Counterpoint research is a young and fast growing research firm covering analysis of the tech industry. Coverage areas are connected devices, digital consumer goods, software & applications and other adjacent topics. We provide syndicated research reports as well as tailored. Our seminars and workshops for companies and institutions are popular and available on demand. Consulting and customized work on the above topics is provided for high precision projects.

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