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)
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.
|Brands||2019 Q1||2019 Q2||2019 Q3||2019 Q4||2020 Q1||2020 Q2|
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.