smartphone sales
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TrendForce expects the smartphone market to slowly recover in 2021, but Huawei won’t benefit
After a dismal year, the global smartphone market will slowly start recovering in 2021, predicts TrendForce. But Huawei won’t benefit and, in fact, will fall out of the research firm’s list of the world’s top six smartphone makers by production volume.
In 2020, global smartphone production dropped 11% year-over-year to 1.25 billion units. This year, TrendForce expects it to increase by 9% to 1.36 million units, as people replace old devices and demand grows in emerging markets. But even that slight recovery is contingent on how the pandemic continues to impact the economy and the global chip shortage that is currently causing production delays across almost the entire electronics industry.
In 2020, the top six smartphone brands in order of production volume were Samsung, Apple, Huawei, Xiaomi, OPPO and Vivo. But this year TrendForce expects Huawei to slip out of that ranking, with the new top-six list comprising Samsung, Apple, Xiaomi, OPPO, Vivo and Transsion.
Those six companies are expected to account for 80% of the global smartphone market in 2021, while Huawei will come in at seventh place.
The main reason for Huawei’s drop is the divestment of its budget smartphone brand, Honor. Huawei confirmed in November that it is selling Honor to a consortium of companies to save the division’s supply chain from the impact of United States government trade restrictions.
The spin-out was meant to shield Honor from the sanctions that have hurt Huawei’s business. But “it remains to be seen whether the ‘new’ Honor can capture consumers’ attention without the support from Huawei. Also, Huawei and the new Honor will be directly competing against each other in the future, especially if the former is somehow freed from the U.S. trade sanctions at a later time,” said TrendForce’s report.
In a previous report published shortly after Honor’s sale was announced, TrendForce predicted that the deal, along with the global chip shortage, meant Huawei would take just 4% of the market in 2021, compared to the 17% it held in 2019, and estimated 14% in 2020. Apple is expected to take away some market share from Huawei’s high-end smartphones, while Xiaomi, OPPO and Vivo will also benefit. TrendForce expects the newly spun-out Honor to take 2% market share in 2021.
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Not even 5G could rescue smartphone sales in 2020
This was going to be the year of 5G. It was going to be the year the next-generation wireless technology helped reverse some troubling macro trends for the industry — or at the very least helped stem the bleeding some.
But the best laid plans, and all that. With about a week left in the year, I think it’s pretty safe to say that 2020 didn’t wind up the way the vast majority of us had hoped. It’s a list that certainly includes the lion’s share of smartphone makers. Look no further than a recent report published by Gartner to answer the question of just how bad 2020 was for smartphone sales.
It was so bad that a 5.7% global decline year-over-year for the third quarter constituted good news. In a normal year, that wouldn’t qualify as good news for too many industries outside of wax cylinder and asbestos sales. But there are few standards by which 2020 was a normal year, so now we’ll take some respite in the fact that a 5.7% drop was a considerably less pronounced drop than the ~20% we saw in Qs 1 and 2.
Some context before we get into the whys here. A thing that’s important to note up front is that mobile wasn’t one of those industries where everything was smooth sailing before everything got upended by a pandemic. In 2019 I wrote a not insignificant number of stories with headlines like “Smartphone sales expected to drop 2.5% globally this year” and “Smartphone sales declined again in Q2, surprising no one.” And even those stories were a continuation of trends from a year prior.
The reasons for the decline should be pretty familiar by now. For one thing, premium handsets got expensive, routinely topping out over $1,000. Related to that, phones have gotten good. Good news for consumers doesn’t necessarily translate to good news for manufacturers here, as upgrade cycles have slowed significantly from their traditional every two years (also an artifact of the carrier subscription model). Couple that with economic hardships, and you’ve got a recipe for slowed growth.
This March, I wrote an article titled “5G devices were less than 1% of US smartphone purchases in 2019.” There was, perhaps, a certain level of cognitive dissonance there, after many years of 5G hype. There are myriad factors at play here. First, there just weren’t a ton of different 5G models available in the States by year’s end. Second, network rollout was far from complete. And, of course, there was no 5G iPhone.
I concluded that piece by noting:
Of course, it remains to be seen how COVID-19 will impact sales. It seems safe to assume that, like every aspect of our lives, there will be a notable impact on the number of people buying expensive smartphones. Certainly things like smartphone purchases tend to lessen in importance in the face of something like a global pandemic.
In hindsight, the answer is “a lot.” I’ll be the first to admit that when I wrote those words on March 12, I had absolutely no notion of how bad it was about to get and how long it would last (hello month nine of lockdown). In the earliest days, the big issue globally was on the supply side. Asia (China specifically) was the first place to get hit and the epicenter of manufacturing buckled accordingly. Both China and its manufacturing were remarkably fast to get back online.
In the intervening months, demand has taken a massive hit. Once again, there are a number of reasons for this. For starters, people aren’t leaving their homes as much — and for that reason, the money they’ve allotted to electronics purchases has gone toward things like PCs, as they’ve shifted to a remote work set-up. The other big issue here is simple economics. So many people are out of work and so much has become uncertain that smartphones have once again been elevated to a kind of luxury status.
There are, however, reasons to be hopeful. It seems likely that 5G will eventually help right things — though it’s hard to say when. Likely much of that depends on how soon we’re able to return to “normal” in 2021. But for now, there’s some positive to be seen in early iPhone sales. After Apple went all in on 5G this year, the new handset (perhaps unsurprisingly) topped sales for all other 5G handsets for the month of October, according to analysts.
The company will offer a more complete picture (including the ever-important holiday sales) as part of its earnings report next month. For now, at least, it seems that thing are finally heading in the right direction. That trend will, hopefully, continue as the new year sees a number of Android launches.
Perhaps 2021 will be the year of 5G — because 2020 sure wasn’t.
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Gartner: Q3 smartphone sales down 5.7% to 366M, slicing COVID-19 declines in Q1, Q2
We are now into the all-important holiday sales period, and new numbers from Gartner point to some recovery underway for the smartphone market as vendors roll out a raft of new 5G handsets.
Q3 smartphone figures from the analysts published today showed that smartphone unit sales were 366 million units, a decline of 5.7% globally compared to the same period last year. Yes, it’s a drop; but it is still a clear improvement on the first half of this year, when sales slumped by 20% in each quarter, due largely to the effects of COVID-19 on spending and consumer confidence overall.
That confidence is being further bolstered by some other signals. We are coming out of a relatively strong string of sales days over the Thanksgiving weekend, traditionally the “opening” of the holiday sales cycle. While sales on Thursday and Black Friday were at the lower end of predicted estimates, they still set records over previous years. With a lot of tech like smartphones often bought online, this could point to stronger numbers for smartphone sales as well.
On top of that, last week IDC — which also tracks and analyses smartphones sales — published a report predicting that sales would grow 2.4% in Q4 compared to 2019’s Q4. Its take is that while 5G smartphones will drive buying, prices still need to come down on these newer generation handsets to really see them hit with wider audiences. The average selling price for a 5G-enabled smartphone in 2020 is $611, said IDC, but it thinks that by 2024 that will come down to $453, likely driven by Android-powered handsets, which have collectively dominated smartphone sales for years.
Indeed, in terms of brands, Samsung, with its Android devices, continued to lead the pack in terms of overall units, with 80.8 million units, and a 22% market share. In fact, the Korean handset maker and China’s Xiaomi were the only two in the top five to see growth in their sales in the quarter, respectively at 2.2% and 34.9%. Xiaomi’s numbers were strong enough to see it overtake Apple for the quarter to become the number-three slot in terms of overall sales rankings. Huawei just about held on to number two. See the full chart further down in this story with more detail.
Also worth noting: overall mobile sales — a figure that includes both smartphones and feature phones — were down 8.7% 401 million units. That underscores not just how few feature phones are selling at the moment (smartphones can often even be cheaper to buy, depending on the brands involved or the carrier bundles), but also that those less sophisticated devices are seeing even more sales pressure than more advanced models.
Smartphone slump: It’s not just COVID-19
It’s worth remembering that even before the global health pandemic, smartphone sales were facing slowing growth. The reasons: after a period of huge enthusiasm from consumers to pick up devices, many countries reached market penetration. And then, the latest features were too incremental to spur people to sell up and pay a premium on newer models.
In that context, the big hope from the industry has been 5G, which has been marketed by both carriers and handset makers as having more data efficiency and speed than older technologies. Yet when you look at the wider roadmap for 5G, rollout has remained patchy, and consumers by and large are still not fully convinced they need it.
Notably, in this past quarter, there is still some evidence that emerging/developing markets continue to have an impact on growth — in contrast to new features being drivers in penetrated markets.
“Early signs of recovery can be seen in a few markets, including parts of mature Asia/Pacific and Latin America. Near normal conditions in China improved smartphone production to fill in the supply gap in the third quarter which benefited sales to some extent,” said Anshul Gupta, senior research director at Gartner, in a statement. “For the first time this year, smartphone sales to end users in three of the top five markets i.e., India, Indonesia and Brazil increased, growing 9.3%, 8.5% and 3.3%, respectively.”
The more positive Q3 figures coincide with a period this summer that saw new Covid-19 cases slowing down in many places and the relaxation of many restrictions, so now all eyes are on this coming holiday period, at a time when Covid-19 cases have picked up with a vengeance, and with no rollout (yet) of large-scale vaccination or therapeutic programs. That is having an inevitable drag on the economy.
“Consumers are limiting their discretionary spend even as some lockdown conditions have started to improve,” said Gupta of the Q3 numbers. “Global smartphone sales experienced moderate growth from the second quarter of 2020 to the third quarter. This was due to pent-up demand from previous quarters.”
Digging into the numbers, Samsung has held on to its top spot, although its growth was significantly less strong in the quarter. Even with that slump, Samsung is still a long way ahead.
That is in part because number-two Huawei, with 51.8 million units sold, was down by more than 21% since last year. It has been having a hard time in the wake of a public relations crisis after sanctions in the US and UK, due to accusations that its equipment is used by China for spying. (Those UK sanctions, indeed, have been brought up in timing, just as of last night.)
That also led Huawei earlier this month to confirm the long-rumored plan to sell off its Honor smartphone division. That deal will involve selling the division, reportedly valued at around $15 billion, to a consortium of companies.
It will be interesting to see how Apple’s small decline of 0.6% to 40.6 million units to Xiaomi’s 44.4 million, will shift in the next quarter, on the back of the company launching a new raft of iPhone 12 devices.
“Apple sold 40.5 million units in the third quarter of 2020, a decline of 0.6% as compared to 2019,” said Annette Zimmermann, research vice president at Gartner, in a statement. “The slight decrease was mainly due to Apple’s delayed shipment start of its new 2020 iPhone generation, which in previous years would always start mid/end September. This year, the launch event and shipment start began 4 weeks later than usual.”
Oppo, which is still not available through carriers or retail partners in the US, rounded out the top five sellers with just under 30 million phones sold. The fact that it and Xiaomi do so well despite not really having a phone presence in the US is an interesting testament to what kind of role the US plays in the global smartphone market: huge in terms of perception, but perhaps less so when the chips are down.
“Others” — that category that can take in the long tail of players who make phones, continues to be a huge force, accounting for more sales than any one of the top five. That underscores the fragmentation in the Android-based smartphone industry, but all the same, its collective numbers were in decline, a sign that consumers are indeed slowly continuing to consolidate around a smaller group of trusted brands.
| Vendor | 3Q20
Units |
3Q20 Market Share (%) | 3Q19
Units |
3Q19 Market Share (%) | 3Q20-3Q19 Growth (%) |
| Samsung | 80,816.0 | 22.0 | 79,056.7 | 20.3 | 2.2 |
| Huawei | 51,830.9 | 14.1 | 65,822.0 | 16.9 | -21.3 |
| Xiaomi | 44,405.4 | 12.1 | 32,927.9 | 8.5 | 34.9 |
| Apple | 40,598.4 | 11.1 | 40,833.0 | 10.5 | -0.6 |
| OPPO | 29,890.4 | 8.2 | 30,581.4 | 7.9 | -2.3 |
| Others | 119,117.4 | 32.5 | 139,586.7 | 35.9 | -14.7 |
| Total | 366,658.6 | 100.0 | 388,807.7 | 100.0 | -5.7 |
Source: Gartner (November 2020)
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Gartner reports first ever global decline in smartphone sales
Global smartphone sales have not been firing on all cylinders for several years now but Gartner’s latest figures record the first ever decline since the analyst began tracking the market all the way back in 2004. India’s top smartphone makers come under pressure from Chinese rivals
India’s smartphone market is heralded as the largest opportunity in mobile right now, but the country’s top players are being disrupted as newcomers, mainly from China, rush into the country. Global smartphone market shrinks, year over year
Worldwide sales of smartphones declined year over year, from Q1 2015 to Q1 2016, according to figures from analyst Strategy Analytics, which it says is the first time in the history of what it dubs the “modern smartphone market” that this has occurred. Led By iPhone 6, Apple Passed Samsung In Q4 Smartphone Sales, 1.9B Mobiles Sold Overall In 2014
If 2014 goes down as the year when smartphone sales globally passed the 1 billion mark (1.2 billion, to be exact, from a total of 1.9 billion mobile phones overall), Q4 will go down as the quarter when Samsung lost its footing as the world’s leader in the category for the first time since 2011. Today, Gartner published its figures for smartphone sales for the year and final quarter… Read More
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Apple’s newest iPhones, the iPhone 6 and 6 Plus, have put a spring in iOS’ smartphone sales figures for fall, and a small dent in the rival Android platform’s share, according to new data from market watcher Kantar Worldpanel ComTech.