Los Angeles, Boston, Toronto, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – August 10, 2020
Smartphone sales in Canada declined 36% YoY in Q2 2020, according to Counterpoint’s North America Monthly Channel Share Tracker service. The COVID-19 outbreak impacted Canadian smartphone sales while the majority of carrier stores remained shut during most of the first half of the quarter.
Apple and Samsung together continue to dominate the Canadian smartphone market. In Q2 2020, the two brands together accounted for 86% of the total smartphone sales compared to 81% during the Q2 2019. In terms of the volumes, Apple declined 24% YoY decline compared to Samsung’s 41% decline.
Commenting on Q2 2020 performance, Senior Analyst, Hanish Bhatia said “The majority of carrier stores remained shut through first half of the quarter, especially those in shopping malls. The impact of COVID-19 on retail was more severe in British Columbia initially and later moved to Quebec and Ontario. We also witnessed the lowest carrier churn rates we have seen in a very long time. This prompted carriers to quickly align with a more online-driven sales strategy, which did see a significant spike. Customers refrained from making new purchases and preferred to isolate at home.”
Adding further on 5G onset in Canada, Bhatia said, “In June, Bell and Telus launched 5G network services in parts of Canada. This is in conjunction with the earlier announcement of Rogers, which launched 5G services earlier this year. 5G in Canada is still in the early stages of deployment. The big three carriers in Canada are leveraging the existing spectrum assets in mid-band (1700-2500 MHz) for the initial 5G push. The global sweet spot for 5G coverage is the 3500 MHz spectrum band, for which the auction has been postponed to June 2021 by ISED (Ministry of Innovation Science and Economic Development). Therefore, we may still be far from experiencing the true 5G experience in Canada.”
Commenting on the OEM performance, North America Research Director, Jeff Fieldhack said, “The market was under tight supply due to border restrictions. Apple was more resilient to declines compared to other brands. Samsung lost ground in the premium category while it gained slightly in the mid-range price segment with the new A-series models doing well. Later in the quarter, the premium Galaxy S-series picked up steam from heavy promotional discounts. Google and LG were the other two brands that did well while Motorola remained under tight supply.”
Talking about the market outlook, Research Analyst, Maurice Klaehne added, “June witnessed some recovery as most stores started to open with the market trending slightly better in July as well. However, there is still a lot of apprehension regarding how the market will behave post the Phase III reopening in some parts of Canada. ‘Back to school’ promotional periods will help. A lot of Canadians have been getting federal support in the form of CERB and CESB for students. Small businesses have also benefited from CEWS support, but it remains to be seen how the market behaves once the federal support ends.”
Key Highlights:
- Apple captured seven spots in the top 10 best-selling devices during the quarter. Apple iPhone 11 continues to remain the best-selling smartphone in Q2 2020.
- Samsung captured the remaining three spots in the top 10 best-selling models list. Surprisingly, the previous generation Galaxy S10 series fared better than the latest Galaxy S20 series. Galaxy S20 sales started to pick during late June driven by heavy promotions.
- LG declined 60% YoY but did well with the K20 series. ThinQ series sales are moderate but steady within Bell and Telus retail stores.
- Google with limited SKUs on the retail shelves also remained in short supply, but the brand has managed to gain some equity in premium markets. It sold better at Rogers stores compared to Bell and Telus.
- Motorola has managed to diversify its presence across Videotron and Freedom apart from the big three carriers, growing from a small base.
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