Sony WH-1000XM5 Review: Raising the bar for ANC, ambient noise & sound quality

The TWS earbuds segment has seen immense growth over the last two years, and they are a popular choice when it comes to personal audio products. But there is still an audience for over-the-ear headphones as they offer more comfort and long-lasting battery life on a single charge. For the past few years, Sony has struck a winning formula with its flagship 1000X-series over-the-ear headphones that deliver great sound quality and superb noise cancellation.

First introduced in 2016 as MDR-1000X, Sony changed the naming scheme with its successor, WH-1000XM2. The fifth-generation headphones in the series, the WH-1000XM5, were recently launched at INR 34,990 (around $425). They feature new materials, refreshed design, eight mics, and an additional processor for ANC. But how does one take the already best and make it even better? This isn’t more like “if it isn’t broken, why fix it?”, but more like “if we can improve it even further, why not?”

We have been testing the Sony WH-1000XM5 for a little over a month and below is our analysis.

♻️Sustainability efforts: Plastic-free packaging & use of recycled materials

Sony, as a brand has been vocal about its sustainability efforts, and the same continues with the WH-1000XM5 too. The packaging does not include any plastic, and the box is made from what Sony calls “Original Blended Material.” It is basically a sustainable paper material made from “bamboo, sugarcane fibres, and post-consumer recycled paper,” Sony explains.

But it is not just the packaging, the body of the headphones is also made from recycled plastic materials using automobile parts. In the box, you get a collapsible carrying case made from premium fabric, a 3.5mm to 3.5mm aux cable (if you want to listen in passive mode), and a USB Type-C cable for charging.

Sony’s sustainability efforts toward the elimination of plastic in packaging are commendable.

Lightweight design with new soft leather for all-day comfort

The Sony WH-1000XM5 sees a major redesign, the first time for the series since its initial launch. The changes are visible right from the flat dome-shaped earcups that feature touch-sensitive gesture controls. While the left earcup has a 3.5mm socket, physical power, and ANC/Ambient Mode toggle buttons, the right earcup has a USB Type-C port for charging.

The earcups are now suspended freely from the hinge, but unlike the previous generation, they can only fold down flat, but cannot rotate inwards. The only drawback of this is that they are not as compact when folded, which means you need to carry a larger case (bundled) when traveling.

Lastly, there is also one more change with the headband. It can now be adjusted freely using the slider and it does not have steps and grooves for adjustment. This also means that you may not be able to set an even length on both sides at all times. But that should not be a major problem.

Talking about comfort, Sony is using new “soft fit leather” padding material for the earcups. It is actually very soft and comfortable to wear for hours. Even for someone like me who wears glasses, I did not feel any pressure or even the slightest discomfort even after wearing the headphones at a stretch for over four hours.

Key specifications: Bluetooth 5.2, LDAC codec, and more

• The 1000XM5 features Bluetooth 5.2 connectivity with an operating range of 10m.
• It supports Google’s Fast Pair feature to quickly pair with a supported smartphone.
• With 30mm dynamic drivers, the headphones have a frequency response range of 20Hz–20,000Hz, and 20Hz–40,000Hz (when switched to LDAC codec, with a sampling of 990kbps).
• It supports SBC, AAC, and LDAC Bluetooth codecs.
• The 1000XM5 leverages the integrated V1 processor, eight microphones (up from four in XM4), and a new QN1 processor for offering impressive noise cancellation.
• Sony has also included multi-point connectivity, allowing you to simultaneously connect the headphones to two devices, such as your smartphone and laptop.
• The multi-point connectivity is a great feature allowing you to seamlessly switch between devices, but it has one downside, it disables LDAC codec, meaning you will not be able to listen to high-res music.
• You can enable/disable features using the “Headphones” app, which is available on both Android and iOS platforms.

Key Features: Speak-to-chat, native assistant, and more

Speak-to-Chat:

• The speak-to-chat feature pauses music playback when it hears you speaking and turns on the ambient sound mode.
• Once you are done talking, the playback is resumed.
• It uses AI algorithms and beamforming mics to detect voice and switch modes.
• While this is a good feature, it does not work 100% accurately and gets triggered when you are humming music, or even when someone in the room sitting close to you starts talking.
• Thankfully, you can disable this in the app.

Adaptive Sound Control:

• This smart function automatically switches between ANC and ambient sound mode depending on your location and surrounding.
• It does this by learning from your daily routine to recognize the location and your preferences.
• For instance, it can detect when you are sitting, walking, running, or commuting, and accordingly switch to ANC or increase the strength of ambient sound when outdoors.
• In our test, this feature worked flawlessly.

Other features:

• The WH-1000XM5 comes with a quick attention mode – resting your palm on the right earcup quickly activates the ambient sound mode and deactivates it as soon as you remove the palm.
• While it works well, it would have been great if it paused the music playback, rather than just muting it.
• There is Spotify Tap feature, double pressing the ANC/AMB button, you can quickly start Spotify music playback, and toggle between playlists. (Spotify app needs to be installed for this to work).
• The proximity sensor can detect when you are wearing the headphones and can instantly pause/start playback when you remove and wear the headphones.
• If you do not wear the headphones for a few minutes, they will automatically be turned off.
• Lastly, there is also Sony’s DSEE Extreme which uses Edge-AI to upscale compressed music in real-time to restore sound lost in compression.
• With DSEE Extreme turned on, the audio sounded slightly detailed, irrespective of the source.

Performance: Sound quality, ANC & mic

We tested the Sony WH-1000XM5 headphones using multiple devices. This includes iPhone 12 (for AAC codec) & MacBook Pro 16 (M1 Pro) as daily drivers. For the LDAC codec, we tested the sound quality using the Samsung Galaxy Z Flip4. For music, we used two sources – Spotify, and Apple Music (with music streaming in High-res Lossless format).

Detailed and entertaining sound quality

Sony has once again managed to offer excellent sound quality that can be enjoyed by both casual music listeners and audiophiles. The WH-1000XM5 has a sonic signature tuned with slightly more emphasis on the bass while also ensuring that it’s not too aggressive. Otherwise, the sound quality is detailed and offers a spacious sound staging. The audio separation is good, and you can easily distinguish between each instrument.

The Sony WH-1000XM5 delivers sound quality that is both detailed and enjoyable.

The good part about the XM5’s audio is that you don’t need to turn the volume all the way up to be able to enjoy whatever you are listening to. When at home, I never went beyond the 50% volume mark, whereas outdoors, even 80% volume was more than enough. ANC has a big role to play here, which we will discuss briefly.

Audio with LDAC sounded marginally better and the connection was stable too. But even with AAC, there is not a big drop in quality, and the music experience is also as enjoyable.

Great noise cancellation, vastly improved mic

With a total of eight mics (four on each earcup), HD Noise Cancelling Processor QN1, and features like Auto NC Optimizer the Sony WH-1000XM5 offers very effective noise cancellation. I was impressed with the results, both indoors and outdoors. I tested under multiple scenarios – inside my room, out in the gallery close to a busy road, traveling in a local train, and also in an airplane.

When indoors, the ANC works great in cutting down the fan and AC noise to a great extent. It does not completely silence everything; you can still hear some noise if the music isn’t playing. But the moment you start playing music, even with 30% volume, all the ambient noises are cut off, letting you enjoy your music.

Outdoors, the eight mics and AI algorithms work great in cutting out the wind noise, allowing you to enjoy your music listening. Even when in an airplane, the headphones cut off drone noise effectively.

The Sony WH-1000XM5 offers improved ANC & mic quality over its predecessor.

The beamforming mics and AI-based voice reduction algorithms accurately separate your voice from wind and other ambient disturbances. Whether you are talking from inside or out on a busy road, the recipient can hear your voice clearly, without even knowing that you are talking from outdoors.

The ambient sound mode also sees big improvement with more mics where outdoor noises now sound more natural and clearer. This helps you to remain more aware of the surroundings when outdoors.

Battery life: Fast charging with improved efficiency

The battery life on the Sony WH-1000XM5 is great. On a full charge, it easily lasts around 29 hours with ANC, which is pretty close to Sony’s claim of 30 hours. It’s great for those long-haul 16-hour flights, as the battery will last you through the journey – from your home to the destination, including layovers.

Sony has included a fast charging feature which is a great addition. During the briefing, a Sony executive told me that even three mins of charge can offer over three hours of music listening time with ANC. I went ahead to test the claim and was pleased with the result. In just four mins, using a 66W USB PD fast charger, the battery went from empty to 21%, and it lasted a little over four hours with continuous music playback at 60% volume.

The WH-1000XM5 can be your perfect companion on long-haul flights.

Key Takeaways:

• The WH-1000XM5 is a perfect example of how even small, iterative improvements can improve an already good product.
• Sony’s sustainability efforts of using recycled materials to build the headphones and no plastic packaging are commendable.
• The headphones are comfortable to wear for many hours without causing fatigue.
• Sony delivers crisp and detailed audio, great noise cancellation, and natural-sounding ambient noise.
• Mic quality on calls has also been improved and thanks to wind-noise reduction, the audio during calls doesn’t sound muffled.
• Battery life is one area where Sony can improve with the WH-1000XM5 successor, especially where competitors like Sennheiser Momentum 4 promise twice the battery life up to 60 hours.
• IPXX rating for sweat and drizzling rains could be another good addition in the next iteration.
• A lot of tap-and-gesture features are pre-defined in the Headphones app, and the ability to customize them as per individual liking is another area where Sony can still improve.

ALSO READ: Other Strategic Reviews on Smartphones, Smartwatches, TWS & More

Global Annual Smartphone Market Grew for the First Time Since 2017; Record Annual Shipments for Apple

Global smartphone shipments grew 4% YoY to reach 1.39 billion units in 2021. Q4 2021 shipments declined 6% YoY to reach 371 million units.
Samsung led the global smartphone market in 2021 with annual shipments of 271 million units.
Apple, Xiaomi, OPPO^ and vivo recorded their highest-ever annual shipments.
The top five brands gained share thanks to a significant decline by Huawei, and LG’s exit from the market.
Apple surpassed Samsung to become the top smartphone vendor in Q4 2021, shipping 81.5 million units.

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

The global smartphone market grew for the first time since 2017, with annual shipments reaching 1.39 billion units in 2021, according to the latest research from Counterpoint Research’s Market Monitor service. Despite the 4% annual growth, however, annual shipments remained below the pre-pandemic level due to continued COVID-19 impacts as well as component shortages.

Commenting on the overall market dynamics, Senior Analyst, Harmeet Singh Walia said “the global smartphone recovery in 2021 followed a pandemic-hit 2020 and subsequent pent-up demand in regions like North America, Latin America and India. Growth in the US was driven largely by demand for Apple’s first 5G-enabled iPhone 12 series seeping through to the first quarter of 2021; demand which continued throughout the year ending on a strong Q4 thanks to Black Friday and holiday season promotions. India, too, had a good year due to higher replacement rates, better availability and more attractive financing options in mid-to high-tier phones. However, China, the world’s biggest smartphone market, continued to decline due to supply-side issues caused by the ongoing component shortages, as well as demand-side issues resulting from lengthening replacement cycles.”

Singh Walia added, “the market recovery could have been even better if not for the component shortages that impacted much of the second half of 2021. The major brands navigated the component shortages comparatively better and hence managed to grow by gaining share from long-tail brands.”

Samsung shipped 271 million units in 2021, up 6% from 2020, mainly due to increased demand for its mid-tier A and M series smartphones. Samsung’s annual shipments grew despite supply-side issues starting with its Vietnam factory being shut in June due to COVID-induced lockdown. While its shipments grew YoY to reach 67 million in the last quarter, the growth was limited by intensifying competition from Apple and Chinese brands in some of its markets such as India and Latin America. Nevertheless, the brand gained a good mind share with the launch of its third-generation foldable phones that did well in the premium segment.
Apple’s global smartphone shipments grew 18% YoY to reach a record 237.9 million units in 2021 due to strong performance by the iPhone 12 series. Apple also grew in key markets such as the US, China, Europe and India. In China, it became the top smartphone brand in Q4 after six years thanks to the iPhone 13, consequently overtaking Samsung as the top smartphone globally in Q4 2021.
Xiaomi’s global smartphone shipments grew 31% YoY to reach a record 190 million units in 2021. The bulk of this growth was in the first half of the year, driven by regions such as India, China, South-East Asia and Europe. While its shipments declined in Q3 after a record Q2, it grew marginally in Q4 to ship 45 million smartphones despite slipping to the fifth position in China as it faces severe component shortages.
OPPO^ was another of the top smartphone players to achieve record 2021 shipments, growing by 28% YoY to 143.2 million units. Its performance in China remained strong in the first half of the year, while it grew in Europe, the Middle East and Africa and South-East Asia in the second half. However, shipments remained flat at 33.5 million units in the last quarter due to supply-side constraints.
vivo grew by 21% YoY to reach annual shipments of 131.3 million units in 2021. vivo leveraged its strong offline penetration and a wide-ranging product portfolio to achieve its highest-ever annual shipments globally. In Q4 2021, however, it declined by 9% YoY, as it lost the number one spot in the Chinese smartphone market to Apple.

Other OEMs also had a notable 2021.

Motorola was the fastest-growing brand among the top 10 smartphone OEMs based on annual global shipments. It took advantage of LG’s exit in the US, where it gained share in the sub-$300 price band by offering a strong lineup of widely available devices. It also continued to perform strongly in Latin America while expanding in overseas markets (including a resurgence in Europe).

realme entered the top five android OEMs globally for the first time as its affordable 5G strategy started to pay off. It also did well in markets such as India where it had a record year. The brand continued to expand its presence in new markets such as LATAM, Europe and the Middle East and Africa.

HONOR managed to finish its first full year as an independent OEM with a ranking among the top ten smartphone OEMs globally, and is already among the top five OEMs in China where it benefitted from the reinstation of its relationship with its suppliers since its separation from Huawei.

Transsion Group continued to perform well in its key markets such as South Asia and the Middle East and Africa. TECNO did well in the entry-tier, while Infinix gained the most in the entry-to mid-tier segment, especially in the countries where it is currently expanding. Going forward, Transsion’s fundamentals are expected to remain solid, as it continues to hold significant clout in its home market of Africa.

Research Director Jan Stryjak concluded, “2021 was a tough year, with component shortages adding further pressure to a market battling with lingering COVID-19 issues. However, the world is slowly getting on top of the pandemic, despite the threat of a resurgence towards the end of last year, and with supply issues hopefully coming to an end towards the middle of this year, there is reason to be optimistic for good growth in 2022 as a whole.”

^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.

Some of our latest regional smartphone market analyses:

India Smartphone Market Crosses 169 Million Units in 2021 to Register Highest Ever Shipments Till Date

Apple Reaches its Highest Ever Market Share in China

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

Analyst Contacts:

Tarun Pathak

Harmeet Singh Walia

Aman Chaudhary

Varun Mishra

Karn Chauhan

Follow Counterpoint Research

Apple Captures 75% of Global Handset Market Operating Profit in Q2 2021

The dynamics of the top global handset OEMs keep changing from a shipment point of view, as we saw with Xiaomi becoming the second-highest selling smartphone brand globally in Q2 2021. However, the picture from a revenue and operating profit point of view has stayed much more stable over the past several quarters.

Apple has been the biggest profit and revenue generator in the handset business. In Q2 2021, it captured 75% of the overall handset market operating profit and 40% of the revenue despite contributing a relatively moderate 13% to global handset shipments. While this performance shows the power of the Apple brand, it is still lower than the peak of Q4 2020 when its revenue share reached a staggering 50%, up from 28% in Q3 2020, and its profit share reached an unprecedented 86%, up from 51% in the previous quarter. While there was a significant jump in its shipment share, from 9% to 17% in the same period, the extent of its revenue share reflects the success of its first 5G-enabled iPhone series. Apple also benefits from interoperability between its devices. The convenience with which one may shift between a Mac, iPad and an iPhone encourages users of one Apple device to stay within the Apple ecosystem by acquiring other of the brand’s devices. This is made possible by Apple’s significant control over both hardware and software, enabling a seamless shift of work on an app between multiple devices. While this has been the case for some time, it has become particularly pronounced with the stickiness of music, media, news, storage, etc. Apple is likely to retain this edge, enabling it to continue charging premium prices for its handsets, thus maintaining high operating profit margins.

Samsung, the biggest global smartphone vendor in terms of annual shipments, usually follows Apple in revenue and profit share. There have been two instances when Samsung has failed to generate the second-highest revenue share – Q4 2019 and Q2 2020, when Huawei reached the number two spot. In terms of profit, however, Samsung has consistently been the number two player for the past several quarters.

Despite relative stability at the top, a major shift in recent quarters was caused by Huawei’s decline following the imposition of US sanctions against it. Huawei’s fall has been accompanied by the rise of other Chinese OEMs, particularly Xiaomi, OPPO and vivo, which were the biggest revenue generators respectively after Apple and Samsung in Q2 2021.

While Xiaomi has done very well in terms of shipments, its performance from a profit point of view has not been as strong. This is because Xiaomi has been focusing on excelling in the shipments game in the past few years. Having made strides on that front, its next goal will be to convert its high-volume smartphone business into a highly profitable one. Signs of this shift started becoming visible in 2021 when, for the first time since H1 2019, it generated noticeably positive operating profit as it started launching smartphones with a higher average selling price (ASP). With its recently launched Mi Mix Fold, Xiaomi also entered the ultra-premium foldable phone segment, so far dominated by Samsung. Its other recently launched high-ASP models include the Mi 11i and Mi 11X Pro. However, their relative shipment performance has significant room for improvement, especially when compared with Samsung’s flagship Galaxy S21 series.

It will be interesting to see how Xiaomi and other Chinese OEMs convince their customer base, which they created by selling high-spec devices at relatively low ASPs, to part with larger sums of money that can afford them already popular and well-regarded premium devices.

It may be to this end that the Chinese OEMs have been trying to create greater brand differentiation, as can be seen between Xiaomi, Redmi and POCO; OPPO, OnePlus and realme; and vivo and IQOO.

Besides trying to increase ASPs in their existing markets, these vendors are also trying to expand into newer geographies, particularly Europe. While Xiaomi became the top player there in Q2 2021, OPPO too has done well. Its sponsorship of Euro 2020 and Wimbledon got it much-needed media attention in the region and helped its flagship, the Find X Series.

Nevertheless, Xiaomi, OPPO and vivo will need to work harder to increase ASPs to improve their profit margins in the long run. This is especially true for their new-generation foldable and rollable phones as well as for their flagships. In this, Samsung is already ahead as it focuses on reliable and consistent profit margin, an area in which so far only Huawei came close to challenging it. Therefore, we may see several more quarters of status quo.

The comprehensive and in-depth Q2 2021 Market Monitor is available for subscribing clients.

iPhone 13 to Boost US iOS Installed Base as Carriers Push Promotions

Apple’s latest announcement brings us the newest generation iPhone 13, iPads and Apple Watch 7. Each of these devices promises improvements in hardware as well as new features. Apple has even expanded Fitness+, further increasing the reach of its services.

The newest iPhone 13 series, like its predecessors, will come in four flavors — iPhone 13 Mini, iPhone 13, iPhone 13 Pro and iPhone 13 Pro Max. Upgrades to the iPhone 13 include a dual-camera system, the latest A15 bionic chip, upgraded battery and storage starting at 128GB now. For the Pro series, additional improvements include a 120Hz refresh rate display, a penta-core A15 chip, up to a terabyte of storage, and further improvements in camera specs and features that Apple calls “cinematic mode”. No charger is included, like the iPhone 12.

iPhone 13 Impact on US Market

The iPhone 12 helped Apple give a large boost to its US iOS installed base, which reached almost 170 million users in Q2 2021. Continued strong promotions, especially from AT&T and Verizon, have helped the iPhone 12 maintain over 60% share of sales of all Apple iPhone products in the 10 months of sales since its launch. In comparison, the iPhone 11 series dropped close to 50% within the same time frame. Consumers are beginning to spend more money again, coming out of the COVID-19-triggered stay-at-home orders and with increased vaccination rates across the country. Apple is betting on continued momentum from this positive growth wave with its latest iPhone 13 series.

Carriers continue to be very aggressive with promotions as they want more people on their 5G service plans. Looking at the Apple.com offers, AT&T is offering up to $1,000 in credit after trade-ins of eligible devices, while Verizon is offering up to $700. T-Mobile is offering $700 or more, which includes an additional $500 from T-Mobile/Sprint. Apple’s own highest trade-in value peaks at $790 for an iPhone 12 Pro Max. AT&T has seen good momentum in upgrading its base, while Verizon will look to keep skimming off high ARPU customers from other carriers. Lastly, T-Mobile will make a grab for consumers using its large mid-band 5G spectrum to entice those looking to upgrade to the latest iPhone 13.

There are still some big unknowns ahead for Apple. The global component shortages may prevent the OEM from having adequate supply. However, Apple has been fairly immune to this so far. Furthermore, while the latest iPhones do offer some nice improvements in camera, display and storage, the iPhone 12 remains a very viable smartphone. Now that it is $100 cheaper, it may entice some customers who are on the fence about purchasing a more expensive iPhone. More to come.

Q2 2021: Apple Achieves Record June Quarter Shipments, Xiaomi Becomes the Second-Largest Smartphone Brand Globally

Global smartphone market grew 19% YoY but declined by 7% QoQ as 329 million units were shipped, led by Samsung.
Xiaomi eclipses 50 million smartphones, becoming the world’s second-largest smartphone brand for the first time ever.
Samsung retained the number one spot with shipments reaching 58 million units in Q2 2021, however, its market share declined to 18% as compared to 22% in Q1 2021 as its shipments declined by 24% QoQ.
realme grew by 135% YoY and 17% QoQ, crossing cumulative shipments of 100 million smartphones since its entry into the smartphone market.
Global smartphone shipment revenues grew by 25% YoY to $96 billion in Q2 2021 setting a second-quarter record.

Seoul, Taipei, Beijing, London, Denver, Boston, Toronto, New Delhi, Hong Kong – July 29^th, 2021

Global smartphone shipments declined by 7% QoQ in Q2 2021, according to the latest research from Counterpoint’s Market Monitor service. This was primarily due to ongoing component shortages as well as the implementation or extension of COVID-19 restrictions across Asia and Europe. Shipments, however, grew by 19% YoY as inoculation rates increased in several major economies preventing the need for lockdowns as stringent as those seen in the same quarter of last year.

Commenting on OEM rankings, Research Director, Tarun Pathak noted, “While Samsung retained the top spot, its market share fell by over 3% to 18% in Q2 2021. Shipments were down due to weak seasonal demand in some of its key regions such as India, Central and Latin America and Southeast Asia followed by production disruption in Vietnam due to COVID-19. Xiaomi had its best-ever quarter as it was able to increase its market share in China, Southeast Asia and Europe. While Apple fell to the third spot, it captured record second-quarter shipments thanks to persistent demand and supply for its iPhone 12 series. OPPO and vivo retained their spots in the top five as OPPO continued expanding to overseas markets and vivo managed to lead the China market for the second quarter in a row.”

Highlighting the revenue dynamics, Research Analyst, Aman Chaudhary noted, “Global smartphone wholesale shipment revenues eclipsed $96 billion*, up 25% YoY but declined 16% sequentially. This comes at a time when the industry was facing supply constraints. Apple captured a record second-quarter revenue share of 41% driven by continuing demand for the iPhone 12 Series followed by Samsung, OPPO, Xiaomi and vivo. However, Xiaomi had a strong quarter in terms of revenue as well, becoming the only brand within the top five to grow its revenue sequentially. It captured its highest-ever revenue share of over 9% driven by the strong performance of Redmi Note and the Mi 11 series.”

Commenting on Xiaomi’s record shipments, Senior Analyst, Harmeet Singh Walia noted, “Xiaomi crossed 50 million shipments for the first time ever driven by a combination of premium and low-to-mid price segment devices. Xiaomi’s exceptional performance comes despite a decline in India due to the spread of new COVID-19 variants. The increased shipments can be attributed to its growth in regions including Europe, Southeast Asia and Central and Latin America where it captured market share vacated by Samsung and Huawei. Southeast Asia and Europe were bright spots for Xiaomi as demand for mid-tier devices increased during the quarter.”

Key Takeaways:

Samsung’s quarterly shipments declined by 24% QoQ and grew by a meagre 7% YoY reaching 57.9 million units in Q2 2021 due to supply constraints. Samsung’s revenue fell by 30% QoQ despite increasing by 7% YoY in Q2 2021. Samsung is diversifying its product mix and channel strategy in regions such as India, Europe and Central and Latin America. Samsung has also shifted focus towards premium devices over the mid-range series on the supply side in regions such as the US where supply constraints and low inventory limited its growth.
Xiaomi recorded a QoQ shipment growth of 8% while its shipments grew by a staggering 98% YoY driven by the strong demand for Redmi 9, Note 9 and Note 10 series. Demand for its premium Mi 11 series remained strong as well. This mix of premium and lower-to-mid segment devices enabled Xiaomi to achieve its highest-ever smartphone revenue in Q2 2021.
Apple’s smartphone shipments fell by 18% QoQ but grew by 30% YoY to reach 48.9 million units in Q2 2021. This is because demand for iPhone 12 series remained high while its supply was not hit as severely by chip shortages because of its strong industry relationships, careful supply chain management, expedited shipping, and ability to cut days from factory to point-of-sale. Apple saw its revenue increase by 52% YoY.
OPPO’s shipments declined by 12% QoQ to 33.6 million units in Q2 2021. Its market share declined to 10% compared with last quarter’s 11%. However, driven by its global expansion and steady performance in China, it saw a growth of 37% compared with the same quarter last year when it enjoyed 9% market share. Following the shipment trends, OPPO’s YoY revenue also declined by 10% QoQ while increasing by over 50% YoY.
vivo‘s shipments declined by 8% QoQ but grew by 44% YoY to reach 32.5 million units in Q2 2021. vivo’s growth was driven by a strong performance in the China market, where it has retained the leadership position for a second consecutive quarter. vivo saw a quarterly decline in revenues of 10%, in line with the decline in its shipments over the same period. However, it saw YoY revenue growth of 69% driven by solid performances of its mid-tier models such as S9, Y52s and Y31.
Among other major OEMs, OnePlus, realme, and Lenovo Group grew the fastest. OnePlus grew by 170% YoY in Q2 2021 with its Nord N series doing particularly well in the North America and Western Europe markets. realme grew by 135% YoY in Q2 2021 as a result of its continuing success in China as well as its expansion in Southeast Asia where its C-series, launched in March this year, did exceptionally well. realme also reached the landmark of hitting 100 million in cumulative shipments since launch. Apart from this, it also reached 50 million units in cumulative shipments in India during the quarter, the fastest by any brand so far in India. Lenovo Group grew by 110% thanks to the success of its Moto E7 Plus in Latin America and Moto G Play 2021 in North America.

*Preliminary revenue, based on wholesale pricing.

Note: All shipments are preliminary and subject to change.

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

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

Some of our other regional smartphone market analysis for Q2 2021 can be found below:

India Smartphone Market Stays Resilient During Second COVID-19 Wave, Crosses 33 Million Shipments

US Smartphone Market Grows 27% YoY in H1 2021 Despite Shortages; OnePlus, Motorola, Nokia HMD Gain as LG Exits

China Smartphone Market Sees Lowest Q2 Sales Since 2012; vivo Leads as Huawei Plummets

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:

Tarun Pathak

Harmeet Singh Walia

Aman Chaudhary

Varun Mishra

Karn Chauhan

Follow Counterpoint Research

Q2 2021: Apple Updates

Apple Marches Forward With Record FY Q3 2021 iPhone Sales

July 27, 2021

Apple continues to break records for iPhone sales, with FY Q3 2021 expected to be another banner quarter. According to Counterpoint Research’s Monthly Market Pulse Model Sales, July 2021 Edition, iPhone sales for Apple’s FY third quarter will come in at 49.6m units. Q3 sales saw continued strong demand for the iPhone 12 series, and to a lesser extent the iPhone 11, which continued to surprise with its longevity.

Source: Counterpoint Monthly Market Pulse, July 2021

According to Counterpoint’s North America Research Director Jeff Fieldhack, “iPhone sales did really well during the quarter for a number of reasons. First, the iPhone 12 saw a late launch so we’re actually a month behind in the cycle. Second, we’re seeing really strong performance in the US, which is coming from a combination of aggressive subsidies from carriers trying to secure new postpaid 5G subs with the 12, and prepaid players offering up attractive iPhone 11 promotions. Third, China again delivered, with its share of sales continuing to increase month over month.”

Apple has supported its sales efforts with strong supply chain management, avoiding issues from component shortages. Dale Gai, Research Director of Counterpoint’s Semiconductor and Components team, commented, “Apple is well protected from the component crunch as it has very strong relationships with its suppliers. Everyone wants a piece of the Apple pie, but to get a seat at the table you have to be able to deliver, hence, iPhone supply will always take priority.”

With demand and supply aligned once again, Jeff Fieldhack is calling for another Apple beat this quarter. “In terms of iPhone shipments, we’re actually ahead compared to some of the more bullish Wall Street analysts. FY Q1 – Q3 2021, we’re at 187m units, which means that a good Q4 will result in full year iPhone shipments in the range of 131m to 136m units.” Tempering his bullish comments Mr. Fieldhack concedes, “There are clearly risks we have not seen in the past. The Delta variant is obviously something we’re keeping an eye on, and we’ll continue to assess data coming from the supply chain. But for now, Apple is managing all fronts well and if there are any surprises this year, my bet is it will be to the upside.”

Apple Takes the Cake with Latest Results

April 28, 2021

Apple had a record-setting quarter with the highest revenues and earnings ever during the Jan-Mar period. All product segments saw record revenue highs. The Mac had an all-time record revenue quarter. All product segments hit record installed bases.

Keys takeaways from the quarter:

iPhone revenues were up a whopping 66%. Our Global Model Sales Tracker shows record high market share in the US and China. The iPhone 12 family is a tremendous success and it maintained momentum through the quarter. Only in March did supply meet demand.
Our numbers show record high iPhone ASPs. This is on the strength of the iPhone 12 family and in particular the iPhone Pro Max—a top seller in the US market. Globally, the higher priced Pro Max and Pro models accounted for over half of all iPhone 12 series devices sold.

Source: Counterpoint Research Q1 2021 Global Mobile Sales Tracker

*Preliminary numbers for Q1.

All segment growth. iPad and Mac revenues increased 79% and 70% year-over-year. Of course, the pandemic caused work-from-home and school-from-home tailwinds. The school-from-home requirements will eventually return to in-school learning. However, the education installed base has dramatically increased. On the work-from-home side, there will be a high percentage of companies offering a continuation or part-time work-from-home scenario. This will not give iPad and Mac the bump it saw during the pandemic, but it will be higher than pre-COVID. In addition, the in-house M1 engine is impressive and helping with both upgrades and pulling in new consumers. Two-thirds of iPads purchasers were new to iPad.

Source: Apple, quarter ending March.

Wearables saw double digit growth. Apple Watch Series 6 and Apple Watch SE had large quarters. 75% of sales were first-time buyers and new health apps and health services helped with stickiness of the hardware.
Services grew 27% year-over-year. Apple added 40mn paying subscribers sequentially and 140mn annually. There are now 660mn paying subscribers. Counterpoint Research believes Apple TV+ saw high growth.

Source: Apple, quarter ending March.

As many OEMs struggle with margins, Apple saw a blended gross margin of 42.5%. 36% for hardware products and over 70% for services.
Regional growth across the board. Rarely do all regions see growth in an individual quarter. All regions saw tremendous growth with Americas being the smallest growth at an admirable 35%.

Recently announced AirTags will give some incremental revenues in coming quarters—especially Q4 2021.
Apple is also being hit by chip shortages. It warned that chip shortages will reduce the June quarter’s revenues by $3 billion to $4 billion, mainly within the Mac and iPad lineup. Because of the uncertainty of the chip shortage, Apple did not give revenue guidance for the June quarter.
In 2019, there was a lot of angst about the China market. The latest March quarter allays those concerns with China revenues growing 88% on strong iPhone, iPad and Mac sales.
Apple has some nice corporate boasts. This is timely as there is political pressure on many technology names (Google, Amazon, Facebook etc):
- The new OS update will give users options to opt out of app tracking.
- Over $200 million in new, green investments are being made.
- The company is investing $430 billion and creating 20,000 new jobs in the US.
- Although there has been some controversy on the Google-Apple COVID contact tracing tech, it has been rolled out in some states. There are also useful vaccine and test tracking apps.
- More on these brags here.

The outlook for 2021 remains strong for iPhones as more countries and regions roll out 5G. iPad, Mac, TWS, and wearables all have good outlooks. With the growing installed base of Apple products, services will also see solid growth in 2021.

Apple’s October – November iPhone Sales Signal Record Quarter and 2021

December 23, 2020

Apple is likely to break previous iPhone sales records during its FY first quarter, according to Counterpoint Research’s Global Monthly Sell-Through Tracker, setting up the company for what could be the biggest year ever for the iPhone.

Although Oct-Nov 2020 global sell-through was down YoY, it declined by only low single digits. That is positive considering the four to six-week launch delay of the iPhone 12 versus the iPhone 11. There is now the possibility of a December sales surge, driven by the new iPhone 12, which would bring the quarter’s sell-through number into record territory.

Source: Counterpoint Research, Weekly Sales Tracker, USA

The popularity of the new model is evident when comparing iPhone 12 and iPhone 11 post-launch sales in the US market on a YoY, week-for-week basis.

Jeff Fieldhack, Counterpoint Research’s Director of US Mobile Devices and Carrier Strategies, commented, “The iPhone 12 consistently outperformed its predecessor during the first six weeks from launch – with the exception of week two, when strong early demand and ample supply delivered an exceptional sales week for the iPhone 11.”

He also noted, “Double and triple-digit weekly sales increases for the iPhone 12 over the iPhone 11 – despite 12 Pro and 12 Pro Max shortages – is sending a strong signal, and we believe the iPhone 12 will bolster global quarterly shipment growth for all iPhones to 21% YoY.”

US out-performance bodes well globally, and Counterpoint Research expects record iPhone shipments for the quarter to be driven not only by North America, but also China, Japan, India and Europe.

“What we’re seeing is a combination of things driving iPhone growth globally,” stated Peter Richardson, Global Head of Research. “These include pent up demand for a new 5G iPhone with both operators and consumers hungry for the new iPhone products, attractive prices on the iPhone 12 aided by bountiful promotional offers. iPhone SE sales also helped momentum together with iPhone 11 longevity, and solid Singles Day, Black Friday and Cyber Monday performance.”

Acknowledging that Apple faces issues, especially around supply, Mr. Richardson stated the company “is well positioned to mitigate the risks. The iPhone Pro and Pro Max are on backorder in the US, but lead times have dropped significantly over the past three weeks. Power management ICs remain constrained, but Apple is likely a favored customer going to the head of the line. The India Wistron controversy is not material and Apple is managing the situation. And in terms of their output capability globally, it is better than last year on increased hiring, overtime incentives and factories running more hours.”

5G Devices Capture Over Two-thirds of Global Smartphone Revenue in Q1 2021

5G, the new frontier in telecommunications technology, is being adopted faster than its predecessor, 4G. Despite the COVID-19 pandemic, we are observing a resilient and consistent rise in 5G smartphone penetration in every region. 5G devices captured more than two-thirds (69%) of global smartphone revenue in Q1 2021, with their shipments reaching 39% of the global total for the quarter, according to Counterpoint’s Quarterly Market Monitor service.

Exhibit 1: Global Smartphone Revenue and Shipment Share of 5G, Q1 2021

Source: Counterpoint Research Market Monitor, Q1 2021

The launch of Apple’s 5G capable iPhone 12 series in Q4 2020 gave a boost to the 5G smartphone market. The momentum continued in Q1 2021 when 5G smartphone shipments grew 7% QoQ despite total shipments declining 10% QoQ.

Although Apple declined QoQ in Q1 2021, it did not slow down as much as expected due to pent-up demand and operator promotions. Further, Apple’s decline was offset by the growth of 5G portfolio of other OEMs across price tiers. Samsung launched its flagship S21 series while Xiaomi’s flagship Mi 11 series was also available during the quarter. Lenovo, vivo, OPPO and realme, all saw impressive growth in both 5G smartphone revenues and shipments, powered by their low- to mid-range 5G offerings.
That said, Apple still recorded the highest 5G smartphone revenue and shipment share in Q1 2021.

Exhibit 2: Global Smartphone Revenue and Shipment Share of 5G by OEMs, Q1 2021

Source: Counterpoint Research Market Monitor, Q1 2021

In terms of regions, China is still the largest 5G market both by revenue and volume, powered by low- to mid-tier offerings. Brands like realme are becoming the key to unlocking 5G accessibility for the masses.

The adoption of 5G, until now, has been driven by the flagship segment. The next part in the 5G adoption story will be convincing the rest of the smartphone user base, which is either price-conscious or utility-driven or both, to shift to 5G. This will depend on OEMs bringing in budget 5G smartphones, governments implementing conducive policies, and a growing basket of 5G use cases to convince users, especially in emerging markets.

Note: Preliminary revenue, based on wholesale pricing.

Installed Base Data Testifies to iPhone 12’s Stellar Performance

Apple iPhone’s installed base increased by only 2% in Q1 2021 compared to Q1 2020. Unlike sales or shipments data, the installed base figure tells us about the number of units of a product actually in use. Expansion in its installed base is not part of Apple’s strategic focus. Rather than reducing ASP (average selling price) to increase installed base, Apple maintains its ASP and gets good revenue from accessories and services.

iPhone Series Installed Base Share in Q1 2020 and Q1 2021

Source: Counterpoint Research

Comparing the Q1 2021 iPhone installed base with that in Q1 2020, initial sales of the iPhone 12 series were better than the iPhone 11 series. The iPhone 11 series’ share in the total iPhone installed base was at 15% in Q1 2020 compared to the iPhone 12 series’ 16% in Q1 2021. It may be noted here that the iPhone 12 series’ release date was one month later than that for the iPhone 11 series. Further, the iPhone 12 series also competes with the low-tier iPhone SE 2020.

One generation old models’ share in this data also shows that the iPhone 11 series’ performance was better than the XS series. The iPhone 11 series performed well not only in its early days after launch but also maintained the momentum for a considerable period after the iPhone 12 series launch. The XS series accounted for 21% of the installed base in Q1 2020, but the iPhone 11 series accounted for 25% in Q1 2021, showing a 4% points difference.

Pro (Pro+Pro Max) Model Share in New Models, Q1 2020 and Q1 2021

Source: Counterpoint Research

The share of Pro models in new iPhones also improved in Q1 2021. The iPhone 11 Pro and Pro Max’s installed base accounted for 44% in Q1 2020 compared to the iPhone 12 Pro and Pro Max’s 54% in Q1 2021. Compared to their predecessors, the iPhone 12 series Pro models have more differentiated features, like in the camera.

Top 5 iPhone Models’ Installed Base, Q1 2021

Source: Counterpoint Research

With iPhone having a relatively small number of SKUs and long product life cycle, its most recent models do not rank at the top when it comes to the iPhone installed base. The iPhone 7 and iPhone 11 ranked first in Q1 2020 and Q1 2021 respectively.

The charts also show that the iPhone 12 series performed well, with the iPhone 12 and 12 Pro Max in the top 10 list in Q1 2021, while only the iPhone 11 was in the top 10 list of Q1 2020.

Counterpoint’s Smartphone Installed Base Tracker covers only newly purchased products. Apple’s latest “over 1 billion active iPhones” figure is similar to the figure for accumulated iPhone sales in five years. To meet this number, no device should exit the market. But this is a very unlikely scenario. Therefore, this figure likely includes refurbished phones and dormant devices. It is estimated that the proportion of new devices among these active devices is around 60%.

Podcast: Operator Promos Drive US 5G Smartphone Prices Under $150

The beginning of 2020 was quite challenging for the smartphone market after the COVID-19 outbreak, which resulted in lockdowns across several countries. However, things eased in the second half with pent-up demand driving smartphone sales. The momentum continued through Q1 2021, with the iPhone 12 and Samsung Galaxy S21 series doing well in the premium segment. Even the telecom operators offered great deals and trade-in offers that helped in ensuring better sales.

Prices of prepaid 5G smartphones in the US have come down in just under two years. With promotional offers from operators, we are even seeing these devices available under $150. So, operators are going all out with their marketing budget to push sales. Talking about this mid-range segment, LG has announced its formal exit from the smartphone market, which will leave a void to be filled in. It creates an opportunity for other smartphone makers such as Samsung, Motorola, Alcatel and TCL to increase their share.

In the latest episode of ‘The Counterpoint Podcast’, host Maurice Klaehne is joined by Research Director Jeff Fieldhack to talk about the US smartphone market, refurb channel, smartphone spec upgrades and more. The discussion highlights how the smartphone market is recovering after the COVID-19 impact, and touches upon the ongoing semiconductor chip shortage and its implications. Jeff also offers insights on how the prepaid and postpaid channels are performing, how 5G mobile broadband and home broadband are shaping up to ease work-from-home, and much more.

Hit the play button to listen to the podcast

You can read the podcast transcript here.

Podcast Chapter Markers

2:10 – What are the key drivers for the US smartphone market?

6:20 – What is the demand like in mid-tier and budget devices, especially with operator promos and tax season coming up?

9:45 – What is the lowest price you’ve seen for 5G smartphones including promotions and discounts?

11:38 – First Huawei sanctions, now LG exiting the smartphone market. Who do you think will fill in that void that is left?

16:24 – How did the refurb market perform in 2020, and does the ongoing chip shortage create an opportunity for the refurb devices?

18:19 – What are the key smartphone specs upgrades and trends that you are seeing in the market?

22:33 – How is 5G shaping up in the US, and can you talk a little bit about what operators are doing?

Also available for listening/download on:

US Smartphone Market Grows 19% YoY in Q1 2021; 5G Smartphone Sales Eclipse 53 m Units

Boston, Toronto, Denver, London, New Delhi, Beijing, Taipei, Seoul – April 30, 2021

The US smartphone market saw a 19% year-over-year (YoY) growth in its Q1 2021 sales helped by the 5G sales from Apple, Samsung and OnePlus, according to Counterpoint’s latest data from the US Channel Share Tracker. The market had sold over 53 million 5G devices at the end of Q1 2021 since the launch of 5G in 2019. In Q1 2021, 5G sales made up 57% of all smartphone sales as more 5G capable devices have come down price tiers. Stimulus checks, a strong vaccination effort, and fewer pandemic restrictions have helped inject renewed confidence in the US economy.

Quarter-over-quarter (QoQ), the US market experienced the usual contraction coming off of a strong holiday period and iPhone 12 launch. More lower-priced LTE smartphones were sold in Q1 as the market shifted towards prepaid sales, temporarily halting 5G sales momentum.

Senior Research Analyst Maurice Klaehne said, “The beginning of 2021 saw continued sales for the iPhone 12 as demand spilled over from its late launch in Q4 2020. This has since tapered off. Samsung also refreshed its S series lineup with the S21 in February. In March, we began seeing the prepaid market grow as the third round of stimulus money and a delayed tax season started having their effect. The 5G smartphone market stalled as more prepaid customers were purchasing LTE devices which were heavily discounted due to tax season sales. 5G smartphones were also discounted, but they have not moved down to more affordable price tiers yet, causing limited adoption. OnePlus was the exception to this trend in prepaid. The OEM grew its share in Metro to double digits through both the N100 and N10 5G.”

US Mobile Devices and Carrier Strategies Director Jeff Fieldhack said, “Overall 5G ASPs (average selling prices) climbed above $800 in Q1 2021 again due to the prolonged demand for premium devices in early 2021. However, Samsung introduced the mid-tier A32 5G and A42 5G in April which we expect will help further drive down overall 5G ASPs. We believe 5G prices will drop below $250 in H2 2021. Qualcomm’s 400 series Snapdragon processor and MediaTek’s 700 and 800 Dimensity series chips will help achieve these price drops. LG’s exit from the market is creating a major opportunity for other OEMs such as Samsung, Motorola, OnePlus and TCL, and carriers are expecting more devices to come with 5G connectivity in lower price tiers. Overall, by the end of Q4 2021, we estimate that 5G smartphone sales will reach 80% of total sales.”

Commenting on the US market outlook, Senior Research Analyst Hanish Bhatia said, “The US economy is looking very promising. Over 23% of the total population is fully vaccinated and states are loosening restrictions on businesses. Apple also had another record-breaking quarter, with North America revenues growing 35% YoY. All these factors point towards renewed strength in the smartphone market demand and 5G adoption. However, we are also watching for component shortages and how this might affect the market going forward. Inventory has been very tight, but supply has been able to meet demand so far. Bigger OEMs such as Apple and Samsung seem to be less affected, but smaller Tier 2 and Tier 3 OEMs may feel the impact to a greater extent going forward. Apple has given guidance that component shortages will affect its Mac and iPad lineups as supply will not be able to meet demand.”

Background:

Analyst Contacts:

Maurice Klaehne

Jeff Fieldhack

Hanish Bhatia

For Press Enquiries
press(at)counterpointresearch.com

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Hit the play button to listen to the podcast

Podcast Chapter Markers

Also available for listening/download on:

Related Posts

US Smartphone Market Grows 19% YoY in Q1 2021; 5G Smartphone Sales Eclipse 53 m Units

Coverage

Insights

Social media

Contact us

Top

♻️Sustainability efforts: Plastic-free packaging & use of recycled materials

Lightweight design with new soft leather for all-day comfort

Key specifications: Bluetooth 5.2, LDAC codec, and more

Key Features: Speak-to-chat, native assistant, and more

Speak-to-Chat:

Adaptive Sound Control:

Other features:

Performance: Sound quality, ANC & mic

Detailed and entertaining sound quality

Great noise cancellation, vastly improved mic

Battery life: Fast charging with improved efficiency

Key Takeaways:

ALSO READ: Other Strategic Reviews on Smartphones, Smartwatches, TWS & More

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Hit the play button to listen to the podcast

Podcast Chapter Markers

Also available for listening/download on:

Related Posts

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Social media

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