european smartphone market Archives

Europe Smartphone Shipments Decline 11% YoY in Q2 2022 as Macro Climate Continues to Deteriorate

The Europe smartphone market declined by 11% YoY and 13% QoQ to 40 million units in Q2 2022, the lowest quarterly total since Q2 2020.
A deteriorating macro climate and geopolitical uncertainly were the main constraints on demand
Samsung and Apple managed to grow shipments and market share YoY, although both declined QoQ due to their withdrawal from the Russian market.
Xiaomi and OPPO*, hit by China lockdowns, suffered double digit YoY declines in their respective shipments.
realme continued its European expansion with double digit YoY shipment growth in Q2 2022

London, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – August 2, 2022

The European smartphone market declined by 11% year-on-year in Q2 2022, according to the latest research from Counterpoint Research’s Market Monitor service, registering the lowest quarterly total since the early part of the COVID-19 pandemic. A deteriorating economic climate and ongoing geopolitical uncertainty continued to hamper both Europe’s and the world’s recovery from the COVID-19 pandemic and chip shortages.

Q2 2022 European Smartphone Shipments and Growth

Source: Counterpoint Research Quarterly Market Monitor, Q2 2022.

Note: OPPO includes OnePlus since Q3 2021.

Counterpoint Research’s Associate Director, Jan Stryjak said, “it was a mixed bag of results in Q2 2022, and year-on-year comparisons mask complex market dynamics. Much has changed in Europe compared to last year and even last quarter, both from an industry and macro perspective.”

Q2 2022 European Smartphone Shipments Share

Source: Counterpoint Research Quarterly Market Monitor, Q2 2022.

Note: OPPO includes OnePlus since Q3 2021.

Samsung remained Europe’s number one vendor and grew both shipments and market share over the year, but this was mostly thanks to Q2 2021 being Samsung’s lowest European shipments total in over a decade due to factory shutdowns in Vietnam. Compared to Q1 2022 though, Samsung’s European shipments dropped by almost a quarter due to its withdrawal from Russia.

Apple also grew both shipments and market share year-on-year in Europe – largely due to the launch of the 5G-enabled iPhone SE – but it declined drastically quarter-on-quarter for the same reason as Samsung.

Xiaomi declined from a peak in Q2 2021, which was its best quarter in Europe ever, having been hit particularly hard by supply issues. However, Xiaomi made the most of Samsung and Apple’s Russian withdrawal and gained significantly quarter-on-quarter, especially in Eastern Europe.

Rounding out the top five, OPPO was hit by supply and manufacturing issues in China, while realme continued its impressive performance in Europe with double digit year-on-year shipment growth (although growth has stalled a bit in recent quarters).

Commenting on the outlook for the rest of the year, Stryjak added “the situation in Europe unfortunately remains bleak. Many countries in Europe are slipping closer to recession, and domestic political tensions in numerous countries beyond Russia and Ukraine are rising, for example in France, Germany and the UK. We remain hopeful, though, that the bottom has been reached and the trajectory should turn upwards soon, but the recovery will likely be long and slow.”

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:

Jan Stryjak

Peter Richardson

press(at)counterpointresearch.com

Follow us on LinkedIn and Twitter

European Smartphone Market Down 14% YoY in 2020; Xiaomi Gains While Huawei and Samsung Lose

Boston, Toronto, London, New Delhi, Beijing, Taipei, Seoul – March 1, 2021

2020 was a rollercoaster year for the European smartphone market. The COVID-19 pandemic hit the region hard, resulting in both supply and demand side issues. Meanwhile, economic concerns and employment worries led to consumers saving rather than spending, and widespread lockdowns meant that many consumers were unable or unwilling to visit retail stores and buy new devices.

Speaking about the overall market, Counterpoint Research’s Associate Director, Jan Stryjak said, “April was the worst month of the year, with sales down almost 50% on 2019. Declining cases and easing restrictions led to a recovery over the summer, but the virus came back with a vengeance. COVID-19 cases rose in September leading to new lockdowns across Europe from November. The end of the year, therefore, saw the market decline again, despite the best efforts of Apple (see below). Overall, 2020 saw the European smartphone market shrink by 14% versus 2019.”

Exhibit 1: Covid-19 Impact on European Smartphone Sales

Stryjak added, ‘In addition to the pandemic, US sanctions on Huawei harmed its ability to bring new products to market and produce existing products in volume. This has created opportunities for some smartphone makers, so while the 2020 was difficult, there were winners as well as losers.’

Exhibit 2: Full year European Smartphone Sales Market Share and Growth

A year to remember:

Xiaomi was the major success story in Europe in 2020, becoming the third largest OEM in the region at expense of Huawei. Strong performance in both Spain and Italy resulted in significant share gains over the year (reaching 28% and 17% of smartphone sales in Q4 2020 respectively), driving overall annual growth of 90% for the year. Xiaomi’s challenge is now to replicate this growth in other areas, particularly more premium markets like France, Germany and the UK: the launch of its flagship Mi 11 in February 2021 should help.
Apple may have declined slightly in 2020, but this doesn’t tell the full story. The decision to delay the launch of the iPhone 12 appears to have paid off, for two reasons. First, it gave the iPhone 11 and iPhone SE the opportunity to demonstrate remarkable longevity, selling continuously well in many markets throughout the year. And second, it built up demand for the new device which, when finally launched in October, sold spectacularly. In fact, the iPhone 12 was Apple’s most successful device launch to date, and drove Apple to a record share high of 30% in Q4 2020.
Oppo entered the European market in 2018, but 2020 was the year it gained some serious momentum. Partnerships with Europe’s largest operator groups – namely Vodafone, Telefonica, Orange and Deutsche Telekom – mean that Oppo’s devices are stocked in the vital operator channel throughout Europe. While sales are still relatively modest in the region, market share has doubled over the year, and a strong fourth quarter puts Oppo in good stead for 2021.
Realme was the fastest growing brand in Europe in 2020, with sales increasing more than ten-fold on 2019. Its strong value proposition has led to good growth in more price-conscious markets such as Italy, Spain and across Eastern Europe.

A year to forget:

Huawei’s inability to produce competitive smartphones thanks to US sanctions means the vendor has all but exited the European smartphone market. Yes, it briefly overtook Apple to become the region’s second largest vendor (behind Samsung) in May, but that was more to do with the premium end of the market taking the brunt of the COVID-19 impact, and Apple being mid-way between launches at that point. Over the year, Huawei’s share has fallen from 15% in January to 5% in December, and there is no reason to expect the trajectory to change in 2021.
Samsung had a tough year. Even though it managed to grow share slightly, this was because its sales didn’t decline as much as the total market. Samsung didn’t capture as much of Huawei’s declining market share as perhaps it would have expected, having faced significant challenges from all directions. First, sales of its flagship Galaxy S20 never really took off – it was regularly outsold in Europe by Samsung’s own mid-range Galaxy A51 and A71 models, as well as devices from Apple and Android competitor Xiaomi (like the Redmi 8/Note 8 and Redmi 9/Note 9 series). Second, competition in Europe has never been greater, with numerous relatively new vendors (see above) fighting it out to capture market share once held by Huawei. And third, Apple’s latest offering – the iPhone 12 – is (finally) 5G enabled, which means Samsung’s near monopoly of the premium 5G segment is over. Samsung’s new flagship Galaxy S21 should do better than the S20 and will likely be the leading Android premium smartphone in Europe in 2021, but Samsung has its work cut out.

Exhibit 3: Q4 European Smartphone Sales Market Share and Growth

A relatively successful Christmas period in Europe hinted at a positive outlook for 2021. Research Analyst, Ankit Malhotra said, “The market ended the year on a strong note in Q4 backed by the demand for the 5G iPhone. This strong momentum is expected to continue in Q1 2021 as sales of iPhone 12 spill over to the next quarter and the Samsung Galaxy S21 is launched. The rush of flagships in Q1 from Samsung and Apple, the eventual easing of lockdowns and expectations of an economic recovery will then lay the foundation for a swift recovery of the market in 2021. Along with that, we will need to keep a keen eye on the development of 5G and the performance of new arrivals like Xiaomi, Oppo, OnePlus, Vivo and realme as they attempt to fill the gap left by Huawei.”

Background

Analyst Contacts:

Jan Stryjak

Ankit Malhotra

Peter Richardson

Follow us on LinkedIn and Twitter

Samsung Galaxy S21: Can it be the Flagship Samsung Needs in Europe?

On January 14, one month earlier than expected, Samsung launched its latest flagship smartphone series – the Galaxy S21. Featuring the latest processors (some will use Qualcomm’s newest Snapdragon 888 chip), a sleeker design and an enhanced camera system, the Galaxy S21 is expected to perform better than last year’s Galaxy S20, which was launched in a market full of uncertainty and worry due to the COVID-19 pandemic.

Sales of the Galaxy S20 never really took off – it was regularly outsold in Europe by Samsung’s own mid-range Galaxy A51 and A71 models, as well as devices from Apple and Android competitor Xiaomi (like the Redmi 8/Note 8 and Redmi 9/Note 9 series).

So, will the S21 fare differently? Unfortunately for Samsung, it is facing significant challenges from all directions.

Apple joins the 5G fight

The Galaxy S21’s price – the basic model will start at €849 ($1,030) – puts it firmly in the premium category, which is Apple’s home turf. In Q3 2020, Apple accounted for 45% of European smartphone sales in the premium segment (>$500 wholesale), followed by Samsung with 39%. But in November, the first full month of iPhone 12 sales, Apple accounted for 74% (Samsung had 16%).

A key concern for Samsung is that Apple’s latest offering – the iPhone 12 – is (finally) 5G enabled, which means Samsung’s near monopoly of the premium 5G segment is over. In Q3 2020, Samsung accounted for 65% of European premium 5G smartphone sales; in November, Apple took 73%.

The fact that Samsung’s early launch was only 12 weeks after the iPhone 12 arrived won’t help matters. The iPhone 12 is proving to be a huge success in Europe, and is taking the wind out of competitors’ sails by dominating promotions, shelf space and the online visibility. By launching the Galaxy S21 so soon, Samsung is risking getting lost in Apple’s wake.

Android competition is heating up

Of course, it is not ideal to compare Android with iOS offerings, but Samsung is also facing increasing competition from fellow Android vendors.

For the last few years, Samsung has been by far the most popular Android brand, with Huawei being the only real alternative. However, Huawei’s market share has dropped drastically (from a high of 27% of European smartphone sales in April 2019 to 4% in November 2020), and a number of vendors are looking to take advantage.

A key driver here is that operators, a particularly important channel in the European market, need to have a diverse portfolio, without over-relying on Samsung as the dominant Android vendor. Therefore, a strong second Android player, a position previously held by Huawei, is up for grabs.

Relatively new entrants into the European market such as Xiaomi and OPPO, along with sub-brands Redmi, OnePlus and Realme, have set sights on capturing market share once held by Huawei, and not just in the mid-tier (Huawei’s sweet spot). All of these brands have launched premium devices, like the Xiaomi Mi 10 series, OPPO Find X2 series and OnePlus 8 series, boasting specifications comparable with Samsung’s but at a more favourable price. Competition in this segment has never been greater.

This may be one reason why Samsung has reduced the starting price of the basic S21 (and S21 Plus) compared to the S20, at the expense of hardware specifications (RAM remains the same in base models, displays are of lower density, camera upgrades are minor, and there are various build material compromises). Samsung has also followed Apple in removing the charging cable from the box.

Having said that, Samsung has pulled all the stops out with the S21 Ultra, which is arguably the best Android smartphone yet. Its screen and camera system are particularly impressive.

So, perhaps Samsung has hedged its bets, positioning the S21 and S21 Plus to compete with the new Chinese vendors, while the S21 Ultra is the ‘bells and whistles’, top-of-the-range flagship that aims to regain Samsung’s title as the king of premium Android.

Samsung to regain premium Android crown

Sales of the Galaxy S21 series will begin in early February, and we expect it to sell marginally better than the Galaxy S20 but fall significantly short of the Galaxy S10. Component shortages may hamper supply (even if demand is strong), and the ongoing pandemic will likely continue to affect consumer discretionary spending. However, some tempting trade-in offers will help. Vodafone UK, for example, is currently offering a total saving of £455 (€515/$625) over the length of the contract when pre-ordering a Galaxy S21 and trading in a Galaxy S9/10.

We, therefore, expect that by mid-2021, the Galaxy S21 will be the leading Android premium smartphone in Europe. But it won’t be able to crash Apple’s party, even as it struggles against a rising tide of Chinese competitors.

Top

Insights Tag： european smartphone market

Europe Smartphone Shipments Decline 11% YoY in Q2 2022 as Macro Climate Continues to Deteriorate