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The world has gone to hell in a COVID handbasket so please take the Global Smartphone shipments Q2 2020 with a grain of salt. In fact, Q2 figures only reinforce that the smartphone market is a bust. And we have added what that means to Australia.

There are some ‘green shoots’, but it is not where smartphone makers had hoped as they planned pre-COVID releases. Global Smartphone shipments Q2 2020 reveal the growth has moved to the $299-599 bracket. Makers had hoped 5G might revitalise flagging sales – they were wrong. Sub $1000 5G is going to decimate the $1000++++ flagship market.

Global Smartphone shipments Q2 2020 declined 24% Year-on-Year (that means in comparison Q2 2019) to 271.4 million units. That is not a true indicator – annual sales are – but it is the first time since Q1 2014 that the smartphone market has fallen below 300 million units for two consecutive quarters. There is blood in the water.

Global Smartphone Shipments Q2 2020 (in Millions, Source: Counterpoint)

BrandsQ1
2019
Q2
2019
Q3
2019
Q4
2019
Q1
2020
Q2
2020
Samsung72.0
21%
76.3
21%
78.2
21%
70.4
18%
58.6
20%
54.2
20%
Huawei
Honor
59.1
17%
56.6
16%
66.8
18%
56.2
14%

49.0
17%
54.8
20%
Apple42.0
12%
36.5
10%
44.8
12%
72.3
18%
40.0
14%
36.5
14%
Xiaomi27.8
8%
32.3
9%
31.7
8%
32.9
8%
29.7
10%
32.3
10%
OPPO*25.7
8%
30.6
9%
32.3
9%
31.4
8%
22.3
8%
30.6
9%
Vivo*23.9
7%
27.0
8%
31.3
8%
31.5
8%
21.6
7%
27
8%
Realme*2.8
1%
5.0
1%
10.2
3%
7.8
2%
7.2
2%
5
2%
LG5.2
2%
Lenovo
Moto
5
1%
Others**87.7
26%
75.98
21%
84.7
21%
98.6
24%
66.6
22%
32.1
12%

What the figures reflect

Samsung’s falling sales in 2020 represent COVID-related supply issues and the earlier closure of its remaining two Chinese factories. In fact, it no longer rates on the China sales chart below.

Huawei’s increase in sales purely represents talking up Samsung’s abandoned Chinese market share. The word is that Chinese people were instructed to buy Huawei to earn more ‘social credits’.

* Interestingly if you aggregate BBK companies (OPPO, realme, vivo, OnePlus, IQ00) it was the world’s largest smartphone maker in Q2. And that is because it produces exceptional quality, has models covering all price points and has a solid focus on non-China business.  It has shown more innovation than any other phone makers and is most definitely not part of the Huawei/ZTE/China spying debate.

** Means less than 1% market share and includes Google Pixel, Nokia and TCL/Alcatel. We have broken out LG and Lenovo to show their slight resurgence.

All you need to take away from this is that globally not much changed. We all know that Huawei lost most of its western market from around May 2019 as it could not provide Google Android or Google apps. Yes, it had an amazing pick up in China where Google services are banned anyway.

China Smartphone Shipments Market Share (%) fell 17% YoY in Q2

The Chinese market in Q2 2020 accounts for a disproportionate 82.3% of total global sales. That amounts to 223 million handsets sold at home and only 48 million sold outside China! This is purely COVID influence as China has 1.8 billion people and relaxed COVID lockdowns earlier.

Brands2019 Q12019 Q22019 Q32019 Q42020 Q12020 Q2
Huawei/Honor34%33%40%35%39%46%
vivo19%19%19%17%18%16%
Oppo18%18%18%16%17%15%
Xiaomi12%12%8%9%10%9%
Apple9%6%8%14%9%9%
Meizu1%1%1%1%0%0%
Others7%11%6%8%7%5%

Why the Chinese market is not indicative of the global market

Huawei ‘channel stuffed’ about 55m cheap 5G ‘Balong’ handsets to Chinese retailers. It also stuffed a further 50 million of its lower cost 4G Nova and Honor brands. Stuffing is a simple sales trick to get the stock off Huawei’s inventory to count as ‘sales’. For all we know these are still sitting in retailers warehouses. Only sell-out figures reveal that, and we will never see those.

Since the US Executive order in May 2019, Huawei has been stockpiling components. It also has fewer problems getting Chinese made components to produce 100% Chinese made, non-Google Android handsets for its home market. It is the only Chinese company that controls most of its supply chain, including the SoC design and now its operating system.

Others Chinese makers on the 5G bandwagon had to wait for Qualcomm SD765/768G 5G chips that have just recently become available. The alternative MediaTek Dimensity 5G chipsets are still in short supply.

Samsung, Apple, BBK (OPPO et al.) and Xiaomi have had massive COVID-related supply issues (modems, camera sensors, screens, etc.) that decimated their ability to deliver. That is slowly improving so Huawei’s success was more a case of making hay while the sun shines. When the global market recovers, we will see Huawei’s global market share percentage drop again.

Apple was particularly hard hit in China with supply issues and only 4G phones. It responded with the iPhone SE 2020 and deep discounts in China. It also suffered from State-sponsored anti-US sentiment.

GadgetGuy’s take – forget China – the Global Smartphone shipments Q2 2020 pie has shrunk, and it is all pretty much the same

OPINION: First, don’t believe the ratbag, advertising-led sensational media that don’t know how to use an abacus or relate market share to Australia. They rely on dodgy, quick and dirty ‘sell-in’ estimates or even worse – consumer preference surveys – to produce clickbait headlines. That same media tells you some Chinese made smartphones spy on you and conveniently forget the heritage of those that advertise with them – rant over.

There are some key COVID issues in Australia (2019/2020 market share in brackets) that our retail spies have shared with us. The links are Gadgetguy reviews and scores.

Global Smartphone shipments Q2 2020
Apple 51% and Android 49% – its never been this close and only 1% separates the king.

<$199 3G/4G (30/20%).

This is the volume pre-paid and ‘burner’ segment, so it is always quite strong. Staples here are typically 1/2GB RAM and 32GB storage like the Nokia 1.3 ($169 and 4.1/5), Motorola e6S ($179) and Nokia 2.3 ($199 and 4./2/5). The outstanding performers are the realme C2 ($199) and vivo Y12  ($199 and 4.4/5) both with 64GB. Apart from the latter two, handsets are so basic that sales often creep up into the next category where you can get amazing handsets with 5000mAh battery, NFC, 128GB and huge screens.

Global Smartphone shipments Q2 2020
Good old Nokia .3 (2020) series are solid phones.

$200-299 4G (was 25/35+%)

This $200-299 segment is hot. The 4/64GB versions of OPPO A5s ($239), Moto g8 PowerLite ($249 4.2/5) LG Q60 ($249), realme C3 ($269 and 4.5/5), OPPO A52 ($299 and 4.8/5) and vivo Y30 ($299) are selling like hotcakes – forget anything with less ram or storage. The standout value here is the realme 5 ($299 and 4.7/5) with 4/128GB, 5000mAh battery and a quad rear camera.

$300-499 (10/25%)

A new subcategory is creeping in from $300 to $499. Nokia’s 5.3 ($349 4.3/5) and Moto g8 ($329 4.6/5) sit here. The outstanding ones typically have 4/128GB, dual sim, 48MP camera or more and include the OPPO A9  ($349 and 4.8/5), realme 6 ($469 and 4.9/5), Samsung A31 ($499), vivo X50 ($499), Moto g8 PLUS ($499 5/5) and OPPO A91 ($499 and 4.9/5).

Global Smartphone shipments Q2 2020
realme’s online sales model makes it one of the fastest growing phone makers on the planet

$500-799 4G (25/10%)

This is where people seek flagship specs at half the price. Look at the Samsung A71 ($699 and 4.6/5) and realme X3  ($699/799 and 4.9/5). Here the star performer is the OPPO Find X2 5G Lite ($749 and 4.9/5) with a Qualcomm SD765G 5G chipset.

Global Smartphone shipments Q2 2020
This is superbly built

$800-999 is now 5G territory (10/5%)

It is showing some ‘green shoots’ of interest. The new SD765G smartphones are here – OPPO Find X2 Neo ($999 and 4.9/5), LG Velvet ($899 and review coming soon), Samsung A71 5G ($899 and 4.6/5) and Motorola Edge ($999 and 4.5/5). There will be more here from Nokia 8.3, vivo, realme, Xiaomi et al. While it makes 5G more affordable, it is still well over what Australians are spending in COVID.

Global Smartphone shipments Q2 2020
Motorola’s new Edge is interesting

$1000+ (10/<5%)

Sales have tanked. People buying here expect 5G, so we will see this category exclusively for 5G flagships like the OPPO Find X2 Pro  ($1599 ad 4.9/5), Galaxy S20/+/5G ($1299/1499), and Galaxy S20 Ultra 5G ($1999 and 4.7/5). There are more coming with the Qualcomm SD865/+ Soc later in the year.

Global Smartphone shipments Q2 2020
These phones are leading the 5G race

Apple has taken a thumping here.

In February (pre-COVID) it had 54% market share, and that has dropped to 51%. Android has gone from 46 to 49% (Source StatCounter). This reflects global figures where Android is now at 75% to Apple’s 25%. Why? It is what people are willing to pay during a crisis, and brand loyalty is less.

The iPhone SE 2020 ($749-999) is Apple’s staple with few sales of any iPhone over $1000.

There are $150 discounts to clear the 2019 iPhone 11 Pro/Max. These may be keener in the coming months to generate sales interest. Our spies say these discounts are not working here as people buy what they can afford.

Why the thumping? Apple users are hanging off to see what 2020 5G models and prices come later in the year.

Global Smartphone shipments Q2 2020
The Apple iPhone SE gives Apple lovers the best value