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One in Three Smartphones Sold was a 5G Phone in China in Q2 2020

  • Huawei captured a massive 60% share of the 5G smartphone market.
  • Huawei reached its highest ever share in China capturing 46% of sales volumes.
  • Apple was the fastest-growing OEM (32% YoY) during the quarter.

New Delhi, Hong Kong, Seoul, London, Beijing, San Diego, Buenos Aires – Jul 24th, 2020

Smartphone sales in China declined 17% YoY in Q2 2020, according to Counterpoint’s Market Pulse – Monthly Smartphone Sales Tracking service. However, the sales increased 9% QoQ indicating some signs of recovery. COVID-19 has been mostly contained in China but the demand for smartphones is yet to recover to pre-COVID levels.

Commenting on the overall Chinese smartphone market growth, Mengmeng Zhang, Research Analyst at Counterpoint Research, said, “Although China’s commercial activities have resumed since the pandemic has subsided, consumer confidence remains low. Both OEMs and Chinese operators are actively pushing 5G smartphones through lowering prices of 5G devices as well as 5G plans. This has increased the adoption of 5G, with one-third of the total smartphone sales during the quarter were 5G devices, the highest adoption in the world. However, this was still not able to offset the overall market decline.”

Exhibit 1: Smartphone Sales Volumes Share (%) of Key OEMs in China

Counterpoint Q2 2020 Smartphone ÓEMs Sales annual Volume Growth Trends

Source: Monthly Smartphone Market Pulse, July 2020

 Highlighting the fiercely competitive landscape, Flora Tang, Research Analyst at Counterpoint, said, “Huawei continues to be the best performer in the China market, grabbing 46% market share in the quarter. Huawei achieved 14% YoY growth despite the overall market slowdown. China has become the most important market for Huawei as its overseas shipments saw a sharp decline after it lost the ability to use GMS in its latest smartphones. Huawei’s hefty investment in expanding distribution networks both online and offline has paid off. Also, Huawei’s 5G portfolio grew quickly with the help of the high-end Mate 30 and P40 series, as well as mid-tier Nova 7 series.

In terms of growth, Apple was the fastest-growing key OEM during the quarter. Despite the market decline, Apple grew an impressive 32% YoY due to the continued popularity of the iPhone 11 series and price cuts. iPhone SE 2020 also quickly entered among the top 3 best-selling iPhones in Q2 2020. June was the best month in terms of smartphone sales so far this year after COVID-19 outbreak driven by surge in sales by Xiaomi (+42% MoM), Huawei (+11%) ”

Exhibit 2: Q2 2020: Smartphone ÓEMs Sales annual Volume Growth Trends

Counterpoint Q2 2020: Smartphone ÓEMs Sales annual Volume Growth Trends

Source: Monthly Smartphone Market Pulse, July 2020

Discussing the development of 5G smartphones in China, Ethan Qi, Senior Analyst at Counterpoint, highlighted, “Despite a slowdown in the smartphone market in China, Chinese OEMs have picked up the pace in 5G developments that were hampered by COVID-19 disruptions in Q1 2020. In Q2, 33% of smartphones sold were 5G enabled compared to just 16% in Q1. The proportion was even higher in June, where more than 40% of smartphones sold were 5G capable. China’s 5G smartphone market is quite consolidated with HOVX grabbing 96% of the market. Huawei leads in 5G smartphone sales accounting for 60% of the market, followed by Vivo, OPPO, and Xiaomi. 5G smartphones in China are still priced in the mid-to-high price range of USD$400 and above, however, 5G smartphone prices are quickly moving towards lower-tier price bands. High-end 5G smartphones are predominantly from Huawei, while Huawei, OPPO, Xiaomi, and Vivo all have various offerings in the mid-tier.”

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

Analyst Contacts:

Flora Tang

Mengmeng Zhang

Ethan Qi

Tarun Pathak

 

Follow Counterpoint Research
press(at)counterpointresearch.com

China Captured 46% of Global 5G Sales in CY 2019

New Delhi, Mumbai, Hong Kong, Seoul, San Diego, London, Buenos Aires – February 20th, 2020

The China smartphone market sell-through declined 8% YoY in CY 2019, according to the latest research from Counterpoint’s Market Pulse Service. The decline was steeper than the Global Smartphone Market sell-through, which reduced 3% YoY in CY 2019. While all the major OEMs declined – OPPO (down by 12% YoY), Vivo (6% YoY), Xiaomi (22% YoY), Apple (26% YoY), Huawei (including Honor) grew 28% for the full year, capturing over one-third of the largest smartphone market in the world. Huawei has been aggressive in China after the US trade ban, which has led to this growth.

Exhibit: Market Share by OEMs CY 2018 vs CY 2019

Counterpoint China Smartphone Sell-Through Market Share CY 2018 vs. CY 2019

China remained the largest contributor to the global 5G market, capturing 46% of the total 5G devices sell-through in 2019. This was again driven by Huawei. While Samsung led global 5G sales with over 40% market share, Huawei (including Honor) alone captured 74% of 5G sales in China. However, the high dependence of Huawei on the Chinese market makes it most vulnerable to the effects of the COVID-19 outbreak on the smartphone market.

Commenting on COVID-19 and its effect on the China smartphone market, Varun Mishra, Research Analyst at Counterpoint Research noted, “China handles at least 50% of global smartphone production and the coronavirus outbreak is bound to adversely affect China as well as the global smartphone market. There will be disruption from the supply-side with production facilities of smartphones and components either shut down or running below full capacity due to labor shortages. The overall demand will also dramatically fall due to disruption in retail. Offline stores will be affected the most. We are estimating sales to drop over 20% in China in Q1 2020. The OEMs which will be affected the most are the ones having production facilities in the Wuhan area like Lenovo and Motorola, and the ones for whom China is the major market like Huawei. OEMs like realme, Honor, and Xiaomi, which are more reliant on online distribution are likely to be least affected compared to those that have a relatively high share of offline sales.”

Exhibit 2: 2019 Q4 China vs Overseas sell-through for Major OEMs: OMEs with higher dependence on China market to be affected more from COVID-19

Counterpoint 2019 Q4 China vs overseas sell-through for major OEMs

*vivo excludes iQOO in the chart above

While the overall market declined, there was considerable shifts within the price bands. The US$600 to US$800 price band increased 33% YoY to account for 6% of the total sales, compared to 4% in 2018. This was mostly driven by the popularity of Apple’s iPhone 11 and Huawei. Huawei led the $200 to $600 price band and was in the top three players in every other price band.

Commenting on the market outlook, Flora Tang, Research Analyst at Counterpoint Research noted, “Going forward, the decline in the Chinese market and the disruption in the supply chain will also lead to a decline in the global smartphone market by 5%. Our base case assumption is that COVID-19 will be largely contained in March. Nevertheless, we are expecting negative growth in China for both Q1 and Q2 2020.  In Q3 2020, the demand is likely to pick-up but there will likely be a supply mismatch. There will be demand for newer models while the available inventory will be of models that are not able to be sold now.  We had expected 5G would catalyze global smartphone market growth in 2020, but now it is likely to remain flat.”

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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