Q2 2022 Archives - Counterpoint

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

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

Jan Stryjak

Tarun Pathak

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India’s Q2 Smartwatch Shipments Highest Ever, Fire-Boltt Leads

Fire-Boltt led the market for the first time in Q2 2022 with 28% share.
Noise second with 26% share overall, but it was the best-selling brand in online channels.
boAt, together with its sub-brands, maintained the third place with 19% share.
Online channels contribute 67% to the total shipment volume with Amazon leading.

New Delhi, Boston, Toronto, London, Hong Kong, Beijing, Taipei, Seoul – Aug 19, 2022

India’s smartwatch market grew 312% YoY in Q2 2022, according to the latest research from Counterpoint’s IoT Service. This growth can be attributed to growing consumer interest in smartwatches as an accessory and as a fitness tracker. There were numerous product launches throughout the quarter as brands sought to grow their offline presence across the country.

Commenting on the market dynamics, Senior Research Analyst Anshika Jain commented, “India’s Smartwatch shipments grew by 4x annually in Q2 2022, with Fire-Boltt leading. Fire Boltt and Noise captured more than half of the total smartwatch market. The market is very dynamic and the top three positions will be fluid in the coming quarters. In terms of channels, we are seeing a steady increase in sales through offline channels with brands launching offline exclusive models and extending their partnerships with distributors across the country. One-third of the smartwatches are sold offline, the highest ever share. In the online domain, Amazon led the market followed by Flipkart, and with Noise, boAt and Fire-Boltt being the best-selling brands.”

Commenting on smartwatch models, Research Analyst Harshit Rastogi said, “We saw over 300 smartwatch models selling this quarter, the highest ever number. The top three brands combined offered 75 different models. The quarter saw over 50 new launches from major brands. Low-end smartwatches continue to attract more competition as half of the total models are in the sub-INR 3500 ($44) retail price band. Brands are pushing various models as consumers look for different options to choose from including dial size, display form etc. The colours and materials used continue to play a huge role in the purchase decision.”

Market Summary

Fire-Boltt led the market and had the most product launches in Q2 2022. Its increasing offline presence and good product features at affordable prices helped the brand to take the lead.
Noise captured the second spot with 26% share and registered 293% YoY growth. The brand has ramped-up its domestic production this quarter and contributed 3/4^th of the locally manufactured smartwatches. It introduced more models with Bluetooth calling features and this feature was present in 40% of its shipments for the quarter.
boAt registered 199% YoY growth and captured the third position. The Storm and Xtend models remained the most popular. It launched “boAt Primia”, its first smartwatch with Bluetooth calling this quarter. Its sub-brands TAGG and Defy continue to grow as well.
Samsung grew 295% YoY in Q2 2022. The Galaxy Watch 4 continued to be its top-selling model thanks to frequent promotional offers.
Dizo remained flat QoQ taking the fifth spot. Dizo Watch 2 Sports was the top model for the brand for the quarter. The brand also launched the offline-only Watch 2 Sports-i during the quarter.
Titan along with its sub-brand Fastrack was 6^th with 2% market share. It leveraged its existing brand value and wide distribution network across the nation.
realme grew 76% YoY this quarter and took the 7^th It also launched its first smartwatch with Bluetooth calling, the Watch R100. The brand maintained its presence almost equally across channels.
Apple registered 197% growth in Q2 2022. The Watch Series 7 continued to be its best seller and has reached to almost 250k shipments till the end of the quarter in India. With upcoming launches in Q3 2022, Apple is expected to gain further market share.
Pebble grew 267% in Q2 2022. It was acquired by Mensa Brands during the quarter with the aim to expand its distribution and further accelerate its growth.
OnePlus maintained its first position in the INR 10,000-INR 15,000 ($125-$190) retail price band due to the popularity of the OnePlus Watch.

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:

Anshika Jain

Harshit Rastogi

Counterpoint Research
press(at)counterpointresearch.com

Global Smartphone Shipments Decline 9% YoY in Q2 2022 Amid Deteriorating Economic and Geopolitical Climate

The global smartphone market declined by 9% YoY and 10% QoQ to 295 million units in Q2 2022.
This was the first time quarterly shipments dropped below 300 million units since Q2 2020 during the early part of the COVID-19 pandemic.
Samsung was the only top-five smartphone brand to grow YoY, increasing shipments by 8% YoY and growing market share by three percentage points to 21%.
Apple’s shipments declined by 5% YoY in Q2 2022, although its share increased in a diminished market.
Xiaomi, OPPO* and vivo, hit by China lockdowns, suffered double digit YoY declines in their respective shipments.

London, New Delhi, Hong Kong, Seoul, Beijing, San Diego, Buenos Aires – July 29, 2022

The global smartphone market took a further dip in Q2 2022, with shipments declining by 9% year-on-year to reach 294.5 million units, according to the latest research from Counterpoint’s Market Monitor service. Deteriorating economic conditions were exacerbated by ongoing geopolitical uncertainty caused by the war in Ukraine, weakening an industry that hadn’t yet fully recovered from the COVID-19 pandemic and chip shortages.

Commenting on the overall market dynamics, Associate Director Jan Stryjak said “the second quarter of 2022 proved challenging for the global smartphone market, with most vendors recording year-on-year shipment declines. Samsung was the only top-five vendor that managed to grow over the year, although this was largely due to Q2 2021 being a particularly poor quarter for Samsung thanks to COVID-related production issues, especially at its Vietnam factory. Nevertheless, Samsung retained the top spot, growing 8% year-on-year and gaining three percentage points of market share to 21%. Apple experienced a relatively small decline of 5% year-on-year due to macroeconomic headwinds, particularly in China. Shipments of Xiaomi, OPPO* and vivo, however, fell by 25%, 15% and 22% respectively.”

These top Chinese brands – facing lockdowns in China on top of a global economic slowdown – were hit particularly hard as the Chinese market fell to its lowest level in almost a decade. At the same time, they are being challenged more aggressively at home by a strengthened HONOR, while Huawei has also begun showing signs of recovery thanks to the trust that it still enjoys among Chinese smartphone users.

Senior Analyst Harmeet Singh Walia noted, “outside the top five, there was also a mixed bag of results. But the clear winner was HONOR, which became the sixth largest smartphone vendor globally (from eighth in Q2 2021) with year-on-year shipment growth of 79% in Q2 2022. This is primarily due to the re-establishment of the brand’s relationships with component players. Transsion Group’s brands TECNO and Infinix also posted shipment growth of 2% and 16% respectively over the year. Offering phones with enhanced design and improved specs paid dividends, as did their strategy to continue incentivising distributors while few other brands are doing so.”

Looking ahead, the challenges are likely to continue for the rest of the year. A pessimistic economic growth outlook with many countries on the brink of recession, ongoing and prolonged geopolitical uncertainty, rising commodity prices and weakening consumer demand for tech products are all impediments to the smartphone industry’s post-COVID recovery.

*OPPO includes OnePlus from Q3 2021

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

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Analyst Contacts:

Jan Stryjak

Harmeet Singh Walia

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

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