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Xiaomi global shipments push past Apple for No. 2 spot
A banner quarter for Xiaomi helped the Chinese mobile company snag the No. 2 spot in global smartphone shipments, according to newly posted Q2 numbers from research firm Canalys. It’s pretty stunning growth for the company, up 83% year-over-year for the quarter and capturing 17% of the global market.
The surge puts Xiaomi at No. 2, globally, behind only Samsung’s 19% by a relatively small margin. Apple is at third with 14% (after its own solid growth has slowed), while fellow Chinese manufacturers Oppo and Vivo round out the top five at 10% a piece.
Huawei, of course, is nowhere to be seen among the top companies. It’s a pretty massive drop, due in no small part to blacklisting that has both barred the company from certain markets (namely, the U.S.) and cut off access to U.S. mobile products, including Google’s Android and various apps.
Image Credits: Canalys
Canalys cites aggressive pricing as a big factor in Xiaomi’s success — particularly contrasted with premium priced offerings from Samsung and Apple.
“It is now transforming its business model from challenger to incumbent, with initiatives such as channel partner consolidation and more careful management of older stock in the open market,” the analyst firm’s Research Manager Ben Stanton said in a release. “It is still largely skewed toward the mass market, however, and compared with Samsung and Apple, its average selling price is around 40% and 75% cheaper respectively. So a major priority for Xiaomi this year is to grow sales of its high-end devices, such as the Mi 11 Ultra.”
The company certainly isn’t a household name in the States (the company has dealt with its own issues here), but of late it has found particular success in Latin America, Africa and Western Europe. It seems that there are still plenty of markets available to continue its expansion as it looks to take on Samsung, even as Oppo and Vivo hope to continue their own respective rapid global growth.
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Cashify raises $15 million for its second-hand smartphone business in India
Tens of millions of people each year purchase a second-hand smartphone in India, the world’s second-largest market. Phone makers and giant online sellers such as Amazon and Flipkart are aware of it, but it’s too much of a hassle for them to inspect, repair and resell used phones. But these firms also know that customers are more likely to buy a smartphone if they are offered the ability to trade-in their existing handsets.
A startup that is helping these firms tackle this challenge said on Thursday it has raised $15 million in a new financing round. New York-based Olympus Capital Asia made the investment through Asia Environmental Partners, a fund dedicated to the environmental sector. The five-year-old startup, which counts Blume Ventures among its early investors, has raised $42 million to date.
Cashify operates an eponymous platform — both online and physical stores and kiosks — for users to sell and buy used smartphones, tablets, smartwatches, laptops, desktops and gaming consoles. But 90% of its business today surrounds the smartphone category, explained Mandeep Manocha, founder and chief executive of Cashify, in an interview with TechCrunch.
“For consumers, our proposition is that we make it easy for you to sell your devices. You come to our site or app, answer questions to objectively evaluate the condition of your device, and we give you an estimate of how much your gadget is worth,” he said. “If you like the price, we pick it up from your doorstep and give you instant cash.”
A few years ago, I wrote about the struggle e-commerce firms face globally in handling returned items. There are many liability challenges — such as having to ensure that the innards in a returned smartphone haven’t been tempered with — as well as overhead costs in reversing an order.
Manocha said that phone makers and e-commerce firms have found better ways to handle returned items in recent years, but they still lose a significant amount of money on them. These challenges have created a big opportunity for startups such as Cashify.
In fact, Cashify says it’s the market leader in its category in India. The startup has partnerships with “nearly every OEM,” including Apple, Samsung, OnePlus, Oppo, Xiaomi, Vivo and HP. “If you walk into an Apple store today, they use our platform.” For consumers in India, if they opted for the trade-in program, Apple.com also uses Cashify’s trading platform, he said.
The startup also works with top e-commerce firms in India — Amazon, Flipkart and Paytm Mall. The firms use Cashify’s trading and exchange software, and also rely on the startup for liquidation of devices. The startup then repairs these gadgets and sells the refurbished units to customers.
“Essentially, whether you come directly to us, or go to popular e-commerce firms or phone OEMs, we are handling the majority of the trading,” he said. Even if a customer trades in the device to OEMs, or e-commerce firms, these companies sell the device to players like Cashify, which serves over 2 million customers in more than 1,500 cities.
The startup plans to deploy part of the fresh capital to expand its presence in the offline market. Manocha said Cashify currently has dozens of offline stores and kiosks at shopping malls across the country and it has already proven immensely effective in brand awareness among customers.
The startup also plans to expand outside of India, hire more talent and invest more in getting the word out about its offerings. Manocha said the team is also working on expanding its expertise to more hardware categories such as cameras.
“The management team at Cashify has an excellent track record in building a strong consumer-facing franchise and building relationships with OEMs, e-commerce companies and electronic product retailers to be present across all touch points for the consumer,” said Pankaj Ghai, managing director of Asia Environmental Partners, in a statement.
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Smartphone shipments dip in China for Q3, led by Huawei decline
China was the first major global smartphone market to rebound from the early days of the COVID-19 pandemic. Stringent lockdown measures were able to help the country recover from the virus relatively quickly during the first wave, as sales started to return well ahead of other areas.
In Q3, however, things have begun to decline again. New numbers from Canalys point to an 8% drop between quarters — and a 15% drop year-over-year. The firm chalks much of the slowdown to longtime market leader Huawei’s ongoing issues with the U.S. government. The problems had a kind of cascading effect that served to impact the number two companies, Vivo and Oppo.
Image Credits: Canalys
“Huawei was forced to restrict its smartphone shipments following the August 17 US sanctions which caused a void in channels in Q3 that its peers were not equipped to fill. Huawei is facing its most serious challenge since taking the lead in 2016,” analyst Mo Jia said in a release. “If the position of the US administration does not change, Huawei will attempt to pivot its business strategy, to focus on building the [Harmony] OS and software ecosystem, as the Chinese government is eager to nurture home-grown alternatives to global platforms.”
Huawei dropped 18% in Mainland China, year-over-year. Vivo and Oppo posted similar declines at 13% and 18%, respectively. Xiaomi was able to make up ground at third place, gaining 19% y-o-y per the figures. Apple, meanwhile, remained relatively steady, in spite of the delated launch of the iPhone 12. Huawei’s continued struggles could provide a vacuum for the competition to fill.
Analyst Nicole Peng notes that the arrival of the 5G handset put the U.S. company in a strong position, looking forward: “iPhone 12 series will be a game changer for Apple in Mainland China. As most smartphones in China are now 5G-capable, Apple is closing a critical gap, and pent-up demand for its new 5G-enabled family will be strong.”
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Indian smartphone market grew by 4% in Q1, but projected to decline by 10% this year
India has emerged as one of the fastest growing smartphone markets in the last decade, reporting growth each quarter even as handset shipments slowed or declined elsewhere globally. But the world’s second largest smartphone is beginning to feel the coronavirus heat, too.
The Indian smartphone market grew by a modest 4% year-over-year in the quarter that ended on March 31, research firm Counterpoint said Friday evening. The shipment grew annually in January and February, when several firms launched their smartphones and unveiled aggressive promotional plans.
But in March the shipment saw a 19% year-over-year dip, the firm said. Counterpoint estimated that the smartphone shipments in India will decline by 10% this year, compared to a 8.9% growth in 2019 and 10% growth in 2018.
The research firm also cautioned that India’s lockdown, ordered last month, has severely slowed down the local smartphone industry and it may take seven to eight months to get back on track. Currently, only select items such as grocery products are permitted to be sold in India.
Prachir Singh, Senior Research Analyst at Counterpoint Research, said the COVID-19 impact on India was relatively mild until mid-March. “However, economic activities declined as people save money in expectation of an extended period of uncertainty and an almost complete lockdown. Almost all smartphone manufacturing has been suspended. Further, with the social distancing norms, factories will be running at lower capacities even after the lockdown is lifted,” he said.
Overall, 31 million smartphone units shipped in India in Q1 2020. Chinese smartphone maker Xiaomi, which has held the tentpole position in what has become its biggest market globally for more than two years, widened its lead to command 30% of the market.
Vivo’s share grew to 17%, up from 12% during the same period last year. Samsung, which once led the Indian market, now sits at the third spot with 16% market share, down from 24% in Q1 2019. Apple maintained its recent momentum and grew by a strong 78% year-over-year in Q1 this year. It now commands 55% of the premium smartphone segment (handsets priced at $600 or above.).
More than 100 smartphone plants in India assemble or produce about 700,000 to 800,000 handsets a day, some of which are exported outside of the country. But the lockdown has halted the production and could cost the industry more than $3 billion to $4 billion in direct loss this year.
“We often draw parallels between India and China. But in China, their factories have adopted automation at various levels, something that is not the case in India,” said Tarun Pathak, a senior analyst at Counterpoint, earlier this week.
China, where smartphone sales declined by 38% annually in February this year, has already started to see recovery. Xiaomi said last month that its phone factories were already operating at more than 80% of their capacity. Globally, smartphone shipment declined by 14% in February, according to Counterpoint.
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Xiaomi tops Indian smartphone market for eighth straight quarter
Xiaomi has now been India’s top smartphone seller for eight straight quarters. The company has become a constant headache for Samsung in the world’s second largest smartphone market as sales have slowed pretty much everywhere else in the world.
The Chinese electronics giant shipped 10.4 million handsets in the quarter that ended in June, commanding 28.3% of the market, research firm IDC reported Tuesday. Its closest rival, Samsung — which once held the top spot in India — shipped 9.3 million handsets in the nation during the same period, settling for a 25.3% market share.
Overall, 36.9 million handsets were shipped in India during the second quarter of this year, up 9.9% from the same period last year, IDC reported. This was the highest volume of handsets ever shipped in India for Q2, the research firm said.
As smartphone shipments slow or decline in most of the world, India has emerged as an outlier that continues to show strong momentum as tens of millions of people purchase their first handset in the country each quarter.
Research firm Counterpoint told TechCrunch that there are about 450 million smartphone users in India, up from about 350 million late last year and 300 million in late 2017. This growth has made India, home to more than 1.3 billion people, the fastest growing market worldwide.
Globally, meanwhile, smartphone shipments declined by 2.3% year-over-year in Q2 2019, according to IDC.
Chinese phone makers Vivo and Oppo, both of which spent lavishly in marketing during the recent local favorite cricket season in India, also expanded their base in the country. Vivo had 15.1% of the local market share, up from 12.6% in Q2 2018, while Oppo’s share grew from 7.6% to 9.7% during the same period. The market share of Realme, which has gained following after it started to replicate some of Xiaomi’s early models, also shot up, moving from 1.2% in Q2 2018 to 7.7% in Q2 2019.
Samsung showroom demonstrator seen showing the features of new S10 Smartphone during the launching ceremony (Photo by Avishek Das/SOPA Images/LightRocket via Getty Images)
The key to gaining market share in India has remained unchanged over the years: better specs at lower prices. The average selling price of a handset during Q2 was $159 in the quarter that ended in June this year. Seventy-eight percent of the 36.9 million phones that shipped in India during this period sported a sticker price below $200, IDC said.
That’s not to say that phones priced above $200 don’t have a market in India. Per IDC, the fastest growing smartphone segment in the nation was priced between $200 to $300, witnessing a 105.2% growth over the same period last year.
Smartphones priced between $400 and $600 were the second-fastest growing segment in the country, with a 16.1% growth since the same period last year. Chinese phone maker OnePlus assumed 63.6% of this premium segment, followed by Apple (which has less than 2% of the overall local market share) and Samsung.
Feature phones that have maintained a crucial position in India’s handsets market continue to maintain their significant footprint, though their popularity is beginning to wane — 32.4 million feature phones shipped in India during Q2 this year, down 26.3% since the same period last year.
Xiaomi versus Samsung
India has become Xiaomi’s biggest market. It entered the country five years ago, and for the first two, relied mostly on selling handsets online to cut overhead. But the company has since established and expanded its presence in the brick and mortar market, which continues to account for much of the sales in the country.
Earlier this month, the Chinese phone maker said it had set up its 2,000th Mi Home store in India. It is on track to have a presence in 10,000 physical stores in the country by the end of the year, and expects to see half of its sales come from the offline market by that time frame.
Samsung has stepped up its game in India in the last two years, as well. The company, which opened the world’s largest phone factory in the country last year, has ramped up productions of its Galaxy A series of smartphones that are aimed at budget-conscious customers and conceptualized a similar series that includes Galaxy M10, M20 and M30 smartphone models for the Indian market. The Galaxy A series handsets drove much of the growth for the company, IDC said.
Even as it lags behind Xiaomi, Samsung shipped more handsets in Q2 2019 compared to Q2 2018 (9.3 million versus 8 million) and its market share grew from 23.9% to 25.3% during the same period.
“The vendor was also offering attractive channel schemes to clear the stocks of Galaxy J series. Galaxy M series (exclusive online till the end of 2Q19) saw price reductions, which helped retain the 13.5% market share in the online channel in 2Q19 for Samsung,” IDC said.
But the South Korean giant continues to have a tough time passing Xiaomi, which continues to maintain low profit margins (Xiaomi says it only makes 5% profit on any hardware it sells). Xiaomi has also expanded its local production efforts in India and created more than 10,000 jobs in the country, more than 90% of which have been filled by women.
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China’s Vivo is eyeing smartphone users in Africa and the Middle East
Africa’s mobile phone industry has in recent times been dominated by Transsion, a Shenzhen-based company that is little known outside the African continent and is gearing up for an initial public offering in China. Now, its Chinese peer Vivo is following its shadow to this burgeoning part of the world with low-cost offerings.
Vivo, the world’s fifth-largest smartphone maker, announced this week that it’s bringing its budget-friendly Y series smartphones into Nigeria, Kenya and Egypt; the line of products is already available in Morocco.
It’s obvious that Vivo wants in on an expanding market as its home country China experiences softening smartphone sales. Despite a global slowdown, Africa posted annual growth in smartphone shipments last year for the first time since 2015 thanks in part to the abundance of entry-level products, according to market research firm IDC.
Affordability is the key driver for any smartphone brands that want to grab a slice of the African market. That’s what vaulted Transsion into a top dog on the continent where it sells feature phones for less than $20. Vivo’s Y series smartphones, which are priced as little as $170, are vying for a place with Transsion, Samsung and Huawei that have respective unit shares of 34.3%, 22.6% and 9.9% in Africa last year.
The Middle East is also part of Vivo’s latest expansion plan despite the region’s recent slump in smartphone volumes. The Y series, which comes in several models sporting features like the 89% screen-to-body ratio or the artificial intelligence-powered triple camera, is currently for sale in the United Arab Emirates and will launch in Saudi Arabia and Bahrain in the coming months.
Vivo’s new international push came months after its sister company, Oppo, also owned by BBK, made a similar move into the Middle East and Africa by opening a new regional hub in Dubai.
“Since our first entry into international markets in 2014, we have been dedicated to understanding the needs of consumers through in-depth research in an effort to bring innovative products and services to meet changing lifestyle needs,” said Vivo’s senior vice president Spark Ni in a statement.
“The Middle East and Africa markets are important to us, and we will tailor our approach with consumers’ needs in mind. The launch of Y series is just the beginning. We look forward to bringing our other widely popular products beyond Y series to consumers in the Middle East and Africa very soon,” the executive added.
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Sub-brands are the new weapon in China’s smartphone war
One of China’s top smartphone brands Vivo appears to have joined its fellows Oppo, Huawei and Xiaomi in setting up a new sub-brand as a softening market and heightened competition at home drive players to venture upon their original reach.
A new smartphone brand called iQoo made its debut on Weibo, China’s answer to Twitter, on Tuesday by greeting in English: “Hello, this is iQoo.” It also playfully encouraged people to guess how its name is pronounced, as the spelling doesn’t resonate with either Chinese or English speakers. Vivo immediately reposted iQoo’s message, calling iQoo a “new friend.”
Vivo has not further revealed its ties with iQoo, although the latter’s Weibo account is verified under Vivo’s corporate name. TechCrunch has contacted Vivo and will update the story when we have more information.
Screenshot of iQoo’s first Weibo post
Sub-brands have become a popular tactic for Chinese smartphone makers to lure new demographics without undermining and muddling their existing brand reputation. As the third-ranked player by shipments in 2018 according to research firm Counterpoint, Vivo is the only one in China’s top five smartphone companies without a subsidiary brand.
“Sub-brands can help fill the gap in parent companies,” Counterpoint’s research director James Yan told TechCrunch. “I think iQoo is a brand born for the gaming market, the online sales channel, or young consumers, similar to what Honor did to Huawei.”
Huawei cemented its top spot with solid growth in shipments last year by playing a two-pronged strategy. Its sub-brand Honor has its eyes on the mid-range and Huawei stays at the top end. Vivo’s sibling Oppo, which falls under the same electronics manufacturing outfit BBK, came up with an exclusively online brand Realme in 2018 to go after Xiaomi’s Redmi in India’s burgeoning smartphone market. Xiaomi pressed on by launching Poco for India’s high-tier market. To further solidify its multi-faceted approach, Redmi shed the Xiaomi branding in January to start operating as an independent brand focusing on cost efficiency.
These moves arrived as years of breakneck growth in China’s smartphone space comes to an end. Overall smartphone sales contracted 11 percent in 2018 according to Counterpoint, as users become more pragmatic and less likely to upgrade their handsets. Local players reacted swiftly by going global and introducing headline-grabbing features like Xiaomi’s folding screen and Honor’s pole-punch display, putting a squeeze on global players Apple and Samsung. In 2018, Huawei shored up a 25 percent market share to take the crown. Trailing behind was Oppo, Vivo, Xiaomi and Apple . Samsung plunged 67 percnet to take seventh place.
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Another port-free phone emerges
In the future, everything will be a screen. Glasses, hats, shoes, windows. You’ll turn on the faucet and bath in screens. Sure, most of us have, at best, a love-hate relationship with the things, but we’ll probably never be able to quit them.
The Apex 2019 is Chinese smartphone maker Vivo’s latest bid to go all-in on all-screen. In fact, the concept phone ditches the front-facing camera altogether, rather than the pop-up method the company has previously shown off. As I’ve noted, I wouldn’t be averse to ditching the front-facing camera altogether, and here it seems to be in service of another emerging mobile trend: the seamless smartphone.
Meizu was, notably, first out of the gate here with the Zero, which debuted earlier this week. With MWC just over the horizon, we could, perhaps, be seeing more of these in the coming weeks, though “concept” is currently the operative word here. And, as our colleagues at Engadget note, while the handset is devoid of USB ports, speaker grilles, headphone jacks and the like, there’s still a small gap for the microphone. But hey, nobody’s perfect.
Again, all of this appears to be pushing toward the inevitable. There are still potential compromises in the service of creating a perfect little sliver of a smartphone — there are wireless charging speeds and the sound quality of a resonant display versus an old-fashioned speaker.
But hey, that’s what concept devices are for.
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Vivo’s all-screen phone with a flip-up camera could arrive in June
The all-screen smartphone is an inevitability. The question at this point, really, is who will get there first and how they’ll accomplish that feat. I spoke to a LG rep at the G7 launch, who suggested that the notch is going to be fact of life for the next couple of years, but a number of manufacturers are pushing to get there a heck of a lot quicker.
Back at MWC in February, Vivo’s Apex handset seemed like little more than a concept, but a couple of new teasers suggest otherwise. A new video demonstrates the handset’s flip-up selfie camera in action, along with a “Save the Date” notice for a June 12 event in Shanghai. The handset appears to be, at the very least, a close relative of the concept phone.
A February press release highlights the concept in a bit more detail.
“In keeping with the promise to continuously support user habits,” the company notes, “Apex also features an 8MP Elevating Front Camera. The camera seamlessly rises in 0.8 seconds when it is required and retracts after use. Together with the hidden proximity sensor and ambient light sensor, this eliminates the space taken up by conventional front cameras, while offering the same selfie experience to users.”
Vivo’s just one of a number of companies who think they’ve got the answer here. When we met with Doogee back in February, the company showed off a number of prototypes aimed at circumventing the notch, including a similar pop up model and a version that slides to reveal a camera inside.
And then, of course, there’s the Lenovo Z5, which a VP for the company showed off via social media earlier this month. Though that presently seems to amount to little more than a sketch. For the moment, all of this feels like a bunch of companies showing off concepts aimed at demonstrating that they “thought of it first.”
Perhaps next month, however, Vivo will be ready to put its money where its mouth is.
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Report: Chinese smartphone shipments drop 21% to reach lowest level since 2013
Analysts have long-warned of a growth crunch in China’s smartphone space, and it’s looking like that’s very much the case right now.
China’s smartphone growth has been the feel-good story for domestic OEMs who have clocked impressive figures as the billion-plus population has rushed online via mobile devices. However, the market reached saturation point in 2017 — when sales stopped growing for the first time — and the first quarter of this year is already showing savage results.
In a report released today, Canalys claimed that shipments across the industry fell by 21 percent year-on-year in Q1.
The total number of mobile devices shipped in China dropped below the 100 million mark in a quarter for the first time since late 2013, the firm added.
“Eight of the top 10 smartphone vendors were hit by annual declines, with Gionee, Meizu and Samsung shrinking to less than half of their respective Q1 2017 numbers,” the report read.
Ouch.
Of the field, only Xiaomi — the firm tipped for an IPO at a $100 billion valuation — was able to post positive momentum as its numbers grew by 37 percent to reach 12 million. That was enough to see it overtake Apple into fourth place, but Xiaomi numbers are still heavily reliant on its $150 Redmi range, which isn’t as lucrative as its higher-end products.
Huawei, Oppo and Vivo led the market. Somewhat incredibly, those three firms plus Xiaomi now account for a very dominant 73 percent of all shipments, which Canalys believes is bad for consumers and smartphone aficionados in China.
“The level of competition has forced every vendor to imitate the others’ product portfolios and go-to-market strategies,” analyst Mo Jia said in a statement. “While Huawei, Oppo, Vivo and Xiaomi must contend with a shrinking Chinese market, they can take comfort from the fact that it will continue to consolidate, and that their size will help them last longer than other smaller players.”
There might be a bright spark coming soon. Canalys anticipates growth in the second quarter as Oppo, Vivo and Huawei trot out new flagship devices. But China’s once-booming industry is now having to contend with the same issue as the U.S.: consumers don’t upgrade their phone as frequently as carriers would like.
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