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Apple’s Smartphone Revenue and Operating Profit Hit June-Quarter Records in Q2 2023

Apple led global smartphone revenues and operating profit with record June-quarter shares of 45% and 85% respectively.
Global smartphone revenues declined by 8% YoY and 15% QoQ to well under $90 billion in Q2 2023.
In the same period, global smartphone operating profit fell to below $13 billion, declining by 3% YoY and 27% QoQ.
Apple was the single-largest contributor to profitability, with an 85% share, up from 84% last quarter and 81% in the same quarter last year.

London, New Delhi, Hong Kong, Seoul, Beijing, Denver, Buenos Aires – Aug 4, 2023

Global smartphone market revenues declined by 8% YoY and 15% QoQ to significantly under $90 billion in Q2 2023, the lowest Q2 figure since 2020 during the height of the global pandemic-related lockdowns. The corresponding operating profit declines were 3% and 27% according to research from Counterpoint’s Market Monitor Service.

Commenting on Apple’s performance, Research Director Jeff Fieldhack noted, “Apple’s shipments declined by 3% YoY while the smartphone market declined by 9% in the same period. At the same time, its ASP increased thanks to a growing contribution of the Pro series, declining contribution of the SE series and the replacement of the Mini in iPhone 13 with a Plus in iPhone 14. As a result, while Apple’s iPhone revenue declined by 2% annually, its revenue share grew, reaching a second-quarter record of 45%. This is up by almost 3% since the same quarter of last year. Its share of global operating profits also grew by 4% since Q2 2022, reaching 85%, another second quarter record for Apple.”

The revenue decline in the overall market was caused by a shipment decline of 9% YoY combined with an ASP growth of only 1% in the same period.

Commenting on overall market dynamics, Research Director Tarun Pathak said, “The low ASP growth is mainly due to seasonality as, for instance, the second quarter is equidistant from peak iPhone demand and new iPhone launch, and sees neither of Samsung’s ultra-premium S or Z-series launches. The annual revenue decline also translated into operating profit losses for the overall market. The sequential operating profit decline suffered additionally from a changing shipment-mix, especially as the shipment share of Apple, the single-biggest contributor to total operating profit, went down by almost 4% QoQ.”

Despite ASP growth stagnating in the quarter, the premiumisation trend is likely to continue as emerging markets drive the next chapter of its growth and mid-tier brands target the premium segment and premium brands aim to sell more of their highest-priced models. Consequently, both global smartphone revenues and operating profits will see a recovery starting in H2 2023. This will support the smartphone market in the period when it struggles with lower shipments.

Feel free to reach us at press@counterpointresearch.com for questions regarding our latest research and insights.

You can also visit our Data Section (updated quarterly) to view the smartphone market share for World, US, China and India.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Harmeet Singh Walia

Tarun Pathak

Jeff Fieldhack

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Global Smartphone Market Declines 14% YoY in Q1 2023; Apple Records Highest-Ever Q1 Share

The global smartphone market declined by 14% YoY and 7% QoQ to record 280.2 million unit shipments in Q1 2023.
Samsung replaced Apple as the top smartphone player in Q1 2023, driven by its mid-tier A Series and the recently launched S23 series.
Apple’s YoY shipment decline was the least among the top five brands. Consequently, it recorded its highest-ever Q1 share of 21%.
Global smartphone revenues declined by 7% YoY to around $104 billion. Apple, Samsung, Xiaomi increased their Average Selling Prices YoY.

London, New Delhi, Hong Kong, Seoul, Beijing, Denver, Buenos Aires – May 5, 2023

The global smartphone market faced further contraction in the post-holiday-season quarter with shipments declining by 14% YoY and 7% QoQ to 280.2 million units in Q1 2023, according to the latest research from Counterpoint’s Market Monitor service.

Source: Counterpoint Research Market Monitor Preliminary Data, Q1 2023
Note: OPPO Includes OnePlus

Commenting on overall market dynamics, Senior Analyst Harmeet Singh Walia said, “Smartphone shipments declined further in Q1 2023 following the weakest holiday-season quarter since 2013, as the slower-than-expected recovery in China was marred by alarming bank failures on both sides of the Atlantic further weakening consumer confidence in the face of unrelenting market volatility. The smartphone market was also hit by some major brands supplying fewer new devices to a market struggling with high inventories at a time when consumers are choosing to renew less often, but with more durable smartphones when they do buy.”

Consequently, global smartphone revenue and operating profit also declined, although not as much as shipments. This was due, in part, to the lower-than-usual decline in Apple’s shipments, to 58 million units in Q1 2023. Apple thereby managed to capture nearly half of all smartphone revenues. While Samsung’s shipments declined 19% YoY despite growing by 4% QoQ to 60.6 million units, the launch of the Galaxy S23 series enabled Samsung’s ASP to increase to $340, up 17% YoY and 35% QoQ, which in turn contributed to global revenues falling relatively less. Apple and Samsung also remain the most profitable brands, together capturing 96% of global smartphone operating profits.

Source: Counterpoint Research Market Monitor Preliminary Data, Q1 2023
Note: OPPO Includes OnePlus

Commenting on Apple’s performance, Research Director Jeff Fieldhack said, “Apple outperformed the market due to several factors. Firstly, the stickiness of its ecosystem prevents its customers from choosing a cheaper smartphone even in times of economic difficulty. Secondly, with sustainability becoming a priority for many, not only has Apple captured nearly half of the secondary market, it is also attracting users who are willing to spend more for longer-lasting devices. Thirdly, it is the preferred brand for Gen Z consumers in the West and is thereby positioning itself for sustained success. At the same time, it has been filling the void left by Huawei in China’s premium market. So, Apple is able to weather economic and other fluctuations better than its rivals while enjoying unflinching loyalty. This also meant Apple was able to meet the demand for the iPhone 14 series which spilt over Q4 2022, when it had problems at its Zhengzhou factory, rather than that share dissipating or transferring to rivals.”

Besides Samsung and Apple, the biggest global smartphone brands from China, Xiaomi, OPPO* and vivo, will have to wait longer for their shipments to rebound as each of them experienced double-digit annual declines in Q1 2023. This was due to a seasonal slowdown in China at a time when the country’s economic recovery is taking longer than expected. OPPO* has recently been facing challenges in overseas markets too. It has had to exit the German market after losing a patent lawsuit with Nokia. At the same time, the three brands’ revenues and profitability have struggled too. While OPPO* and vivo saw both annual shipment and ASP declines, leading to double-digit revenue declines, Xiaomi’s slight annual ASP growth could also not prevent a double-digit revenue decline in Q1 2023.

The smartphone market as a whole, too, is likely to struggle for the next couple of quarters. Commenting on the near-term outlook, Research Director Tarun Pathak said, “The persistent issues affecting the smartphone market are unlikely to abate anytime soon. Moreover, the recent decision by OPEC countries to cut oil production may lead to higher inflation rates, causing a reduction in consumers’ spending power. As a result, even if the decline in smartphone shipments stabilises, a significant recovery is unlikely before the year-end holiday quarter.”

*OPPO includes OnePlus

You can also visit our Data Section (updated quarterly) to view the smartphone market share for World, US, China and India.

Background

Feel free to reach us at press@counterpointresearch.com for questions regarding our latest research and insights.

Analyst Contacts

Harmeet Singh Walia

Tarun Pathak

Prachir Singh

Follow Counterpoint Research

2022 Global Smartphone Shipments Lowest Since 2013; Apple Regained No. 1 Rank with Highest-Ever Operating Profit Share of 85%

The global smartphone market declined by 18% YoY to reach 304 million units in Q4 2022.
Apple replaced Samsung as the top smartphone player in Q4 2022, driven by the recent launch of the iPhone 14 series.
The 2022 global shipments declined by 12% to 1.2 billion units, the lowest since 2013.
Global smartphone revenue declined by 9% to $409 billion, the lowest since 2017.
Apple achieved its highest-ever global smartphone shipment, revenue and operating profit share in 2022.

London, New Delhi, Hong Kong, Seoul, Beijing, Denver, Buenos Aires – February 3, 2023

The global smartphone market remained under pressure in Q4 2022 with shipments declining by 18% YoY to the lowest level for a holiday quarter since 2013, even as they grew by 1% QoQ to 303.9 million units, according to the latest research from Counterpoint’s Market Monitor service. Shipments for the full year 2022 also declined to 1.2 billion units, the lowest since 2013.

Commenting on overall market dynamics, Senior Analyst Harmeet Singh Walia said, “The war in Ukraine, inflationary pressures, economic uncertainty and macroeconomic headwinds kept the consumer sentiment weak in 2022 while smartphone users reduced the frequency of their purchases. The smartphone market remained under pressure in the fourth quarter of 2022 as the cost-of-living crisis, shortage in the labor market and a decline in consumers’ purchasing power resulted in double-digit declines in the shipments of each of the top five smartphone players.”

Consequently, global smartphone revenue and operating profit also saw a decline, although to a lesser degree than in shipments. An increased mix of premium phone offerings by major OEMs drove up the overall average selling price (ASP) by 5% YoY in 2022. The 9% decline in revenue, while lower than in shipments, resulted in annual smartphone revenues amounting to $409 billion, the lowest since 2017. A larger decline was prevented by a 1% growth in Apple, the only top five smartphone OEM to do so.

Commenting on Apple’s performance, Research Director Jeff Fieldhack said, “having proficiently managed its production problems, Apple was able to weather a year already marred by economic and geopolitical turmoil better than other major smartphone players. Its iPhone Pro series continued performing well and its share of iPhone shipments could have been even higher if not for the production issues caused by the COVID-19 breakout at the Zhengzhou factory, which produces the vast majority of Pro series volumes. As a result, some Pro series volumes got pushed to January.”

Consequently, its shipment, revenue and operating profit declined YoY in Q4 2022. However, it outperformed a struggling smartphone market in terms of shipment, revenue and operating profit growth, in turn achieving its highest-ever shares of 18%, 48% and 85% in these metrics respectively, in 2022.

Apple also benefited from the premium segment, its primary constituency, being less severely affected by the economic and geopolitical uncertainties that marred the year. Moreover, mature smartphone users are now choosing premium devices that last longer.

Elaborating on the ‘premiumization’ trend, Research Director Tarun Pathak said, “premiumization can also be seen within the Android ecosystem and is being led by Samsung with its foldable smartphones. As a result, Samsung was the only top five OEM besides Apple to see a 1% growth in revenue, even though its shipments declined by 5% in 2022 and operating profit declined by 1%. The performance of its flagship smartphones was stronger than market projections. Nevertheless, with a smaller profit decline than the overall smartphone market, its operating profit share increased slightly to 12% in 2022.”

Chinese smartphone players suffered from domestic lockdowns for much of the year in addition to facing global economic and geopolitical difficulties. As a result, the shipments of Xiaomi, OPPO* and vivo fell by more than 20% each. Despite offering premium phones at aggressive margins, Chinese brands are yet to make headway in the premium market and have not been able to capitalize completely on Huawei’s decline. Unsurprisingly, then, their revenue as well as operating profit saw double-digit declines.

We expect the market to remain under pressure until the end of the first half of 2023 and to start recovering thereafter.

*OPPO includes OnePlus from Q3 2021

You can also visit our Data Section (updated quarterly) to view the smartphone market share for World, US, China and India.

Background

Feel free to reach us at press@counterpointresearch.com for questions regarding our latest research and insights.

Analyst Contacts

Harmeet Singh Walia

Tarun Pathak

Jan Stryjak

Follow Counterpoint Research

Global Handset Market Operating Profits Grow 6% YoY in Q2 2022 Despite Declining Revenues

Global handset revenues declined 2% YoY and 15% QoQ to $95.8 billion in Q2 2022.
Global handset operating profits grew 6% YoY to $13.1 billion in Q2 2022.
The top five handset makers contributed around 80% of the total revenue.
OPPO*, vivo and Xiaomi saw double-digit YoY declines in their revenues.
Samsung and Apple’s revenues grew 25% and 3% YoY respectively.
YoY growth in operating profit was also driven by Samsung and Apple while the other three of the top five brands saw significant double-digit declines.

London, New Delhi, Hong Kong, Seoul, Beijing, San Diego, Buenos Aires – September 28, 2022

Global handset market revenues declined for a second consecutive quarter, falling 2% YoY and 15% QoQ to $95.8 billion in Q2 2022, according to the latest research from Counterpoint’s Market Monitor service. A fall in global handset shipments due to factors including Chinese lockdowns and ongoing geopolitical uncertainty caused the revenues to decline despite the average selling price (ASP) going up by 6% in the same period. Consequently, the annual operating profit growth of 6% corresponded with ASP growth rather than shipment decline, reaching $13.1 billion in Q2 2022.

Commenting on the overall market dynamics, Senior Analyst Harmeet Singh Walia said, “Global handset revenues capitulated under the burden of continuing shipment declines. But with global brands such as Samsung and Apple leading overall ASP growth and even some Chinese brands such as Xiaomi, Lenovo Group, HONOR, Huawei and Transsion Group working towards a shift to higher ASP devices in the past year, overall operating profit saw annual growth in the second quarter of the year. It is, nevertheless, important to set this growth in context. While handset makers’ upward shifts in price bands enabled some of them to increase profit margins (with the notable exception of Xiaomi), much of the annual growth can be attributed to a smaller base in the COVID-battered Q2 2021 rather than to consistent growth in operating profits through the quarters. Compared with the previous quarter, operating profits declined 29% after declining 26% QoQ in Q1 2021.”

Given that handset revenues as well as profits are largely driven by Apple, as can be observed through the disparity in revenue and profit share in the chart above, we expect a growth in both the aspects in the second half of the year.

Associate Director Jan Stryjak said, “Revenue growth in the second half of the year, when compared to the first half, is a near certainty due to the cyclical launch of the highly profitable and relatively economic downturn-resistant iPhone. But with geopolitical uncertainty worsening, inflation levels rising and fears of recession growing, the handset market is bound to get impacted and may take longer to return to the trajectory predicted prior to the pandemic.”

*Note: OPPO includes OnePlus since Q3 2021

Feel free to reach us at press@counterpointresearch.com for questions regarding our latest research and insights.

You can also visit our Data Section (updated quarterly) to view the smartphone market share for World, US, China and India.

Background

Analyst Contacts

Harmeet Singh Walia

Jan Stryjak

Tarun Pathak

Follow Counterpoint Research

Global Smartphone Market – Apple Gained the Top Spot in Q4 2019 While Huawei Surpassed Apple to Become the Second-Largest Brand in CY 2019

Global smartphone market returns to quarterly growth (3% YoY) in Q4 2019, but declined (1% YoY) in 2019 overall
Apple iPhone shipments grew in 11% YoY during Q4 2019, even without a 5G variant
realme was the fastest-growing brand in CY 2019 (453% YoY)

New Delhi, Mumbai, Hong Kong, Seoul, San Diego, London, Buenos Aires – Jan 30^th, 2020

The global smartphone market declined 1% YoY in CY 2019, according to the latest research from Counterpoint’s Market Monitor service. This is the first time that the smartphone market has declined for two consecutive years. However, the decline was slower than in 2018 (4% YoY). The smartphone market actually grew 3% YoY in Q4 2019, indicating signs of a recovery and is expected in 2020.

2019 brought both innovations, 5G, folding displays, but also an uncertain trade and political climate. Commenting on the global market dynamics, Varun Mishra, Research Analyst at Counterpoint Research noted, “There have been growing tensions among several countries that have impacted the smartphone market. For example, the US pressure on Huawei, and tensions between Japan-Korea that led to uncertainties in the memory market. Supply chains have been upset, causing various companies to rethink their strategies and reduce dependence on single markets. 2020 will likely see efforts to further diversify investments across geographies to mitigate risks. The current coronavirus outbreak in China is the latest issue to threaten supply chains.”

Despite the sanctions, Huawei surpassed Apple to become the second-largest brand in 2019. This was the result of an aggressive push from Huawei in the Chinese market, where it achieved almost 40% market share. China accounted for over 60% of Huawei’s total shipments. Outside China, Huawei is trying to continue selling its older devices. But with rising competition, its value proposition is being gradually undermined. And while Huawei is working on its own operating system, it will almost impossible for it to compete with Android anywhere outside China.

Within the quarter however, after two-year, Apple gained the top spot in the Global Smartphone Market. This was driven by the iPhone 11 series beating expectations. iPhone revenues were up year-on-year for the first time since September 2018.

Exhibit: Smartphone Shipment Market Share CY 2018 and CY 2019

Source: Counterpoint Research: Quarterly Market Monitor 2019 Q4

We also saw smartphone brands changing their strategies in 2019 to gain market share. For example, Samsung revamped its A series, giving a push to the mid-segment. Apple launched its iPhone 11, with multiple cameras, at a lower price than its predecessor. At the same time, Apple increased its focus on services. Chinese OEMs expanded into new markets in 2019, especially Europe. 5G provided an opportunity for OEMs to gain mindshare by launching industry-first “5G-capable” devices in markets that were early to launch 5G services.

Smartphone makers also brought several innovations in 2019 paving the way for what will be mainstream in future. Foldable displays, punch hole displays, higher megapixel cameras, higher refresh rate displays, in-display sensors, optical zoom, and super-fast charging to name a few. Some features were quickly adopted across the price range, giving consumers a variety of capable smartphones to choose from at affordable prices.

Commenting on the adoption of 5G and the market outlook Research Analyst, Abhilash Kumar added, “2019 also saw the deployment and initial adoption of 5G, especially in the US, Europe, China, and Korea. With chipset players, operators and OEMs all preparing aggressively for 2020 and working towards bringing the prices of 5G down, the foundation for the 2020 growth has already been laid. The transition from 4G to 5G in the developed markets and the continued transition from 3G to 4G, feature phones to smartphones and upgrades will lead the smartphone market to grow in the coming year”.

Exhibit: Smartphone Shipment Market Share Q4 2018 and Q4 2019

Source: Counterpoint Research: Quarterly Market Monitor 2019 Q4

Key Takeaways:

The increasing competition in the smartphone market is also leading to a gradual consolidation. The top five brands captured 66% of the market in 2019 compared to 65% in 2018 and 62% in 2017.
Samsung remained flat during 2019 Q4 while grew 2% YoY for CY 2019. Samsung has been one of the leading players in 5G in 2019, shipping over 6.5 Million 5G capable devices in 2019.
Apple iPhone shipments grew 11% YoY during the Q4 2019, even without a 5G variant. The iPhone 11 series received an excellent consumer response in all regions. The dual-camera, and lower pricing of iPhone 11 than the XR at the same point last year, helped propel sales.
Apple’s Service revenue grew 17% YoY in 4Q 2019, reaching a record high in many categories including music, cloud and Apple Care. Apple has set itself new targets for services as it has already surpassed many it set for 2020. It will focus on new areas and services to generate new revenue streams.
realme continued its growth streak and remained the fastest growing brand during the quarter (163% YoY) as well as the year (453% YoY). The brand entered the top five in the Indian market for the full year, which contributed to its strong growth.
Xiaomi grew fast in 4Q (28% YoY). It remained the top player in the Indian smartphone market for the full year in 2019.
5G smartphones contributed to 1% of global smartphone shipments in 2019. 2020 is expected to be the breakout year, with 5G smartphones poised to grow to around 18% of total global smartphone shipment volumes in 2020.

For press comments and inquiries please reach out to press (at) counterpointresearch.com

Analyst Contacts:

Tarun Pathak

Shobhit Srivastava

Varun Mishra

Abhilash Kumar

Follow Counterpoint Research
press(at)counterpointresearch.com

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Insights Tag: Apple revenue

Apple’s Smartphone Revenue and Operating Profit Hit June-Quarter Records in Q2 2023

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