Sign in with Microsoft

IDC has confirmed what we have known for some time. Smartphone Q2 2020 sales are down 7.9% to about 230 million handsets. Gartner predicts a 20.4% drop this year. And 5G sales are dead except in China.

Why are Smartphone Q2 2020 sales down? Few have the funds or the inclination to commit to leases or payment plans. The outright purchase of lower-cost, yet fully-featured smartphones and a massive move to lower-cost 4G MVNOs are flourishing.

And 5G is a massive con with coverage nowhere near the 5G coverage maps. Nor is there a killer app or use yet that demands it. No 5G is a marketing ploy to sell more phones that has failed miserably. Until 5G phones cost no more than 4G anyway.

IDC found that for Smartphone Q2 2020 nearly 85% of phones were under US$600 (AU$800) and the market share as follows (the figures are an amalgam from different sources but tally with what our retail sources tell us).

  • <US$100 – 15% and reducing as there is better value in the next category
  • $100-399 – 60% and rapidly escalating
  • $400-599 – 10% and growing by taking sales from the next category
  • $600-799 –8% (entry-level 5G using Qualcomm SD765/8 5G)
  • $799-999 – 5% (premium 5G using Qualcomm SD865/+)
  • $1000+ – 2% (foldables and ultra-premium)

Now, these are Smartphone Q2 2020 global figures. We will relate these to Australia later.

Each analyst uses different methodologies – sell-in (IDC), sell-out (Gartner), consumer sentiment (Kantar), manufacturer-supplied (GfK) or activation figures (Statcounter).

These are what we consider the most likely global figures from Counterpoint that use an amalgam of sources.

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%
Others87.7
26%
75.98
21%
84.7
21%
98.6
24%
66.6
22%
32.1
12%
Total341m341m380m401m295m283m

* OPPO is part of the BBK group, and it accounts for over 63 million sales in Q2 making it the largest Global Android handset maker.

Smartphone Q2 2020 – China sales only

First, you must understand that of the global sales of 283m in Q2 about 91m or 32% are China sales.

Vendor
(Canalysis figures)
Q2 China Units in millions/%Y-o-Y growth %
Huawei40.2/44.48
vivo14.8/16.3-13
OPPO14.5/16-19
Xiaomi9.3/10.3-19
Apple7.7/8.535
Others4.1/4.5-49
Total90.7/100-7

What do China figures mean?

It is an anomaly caused by COVID and that Huawei had the only low-cost 5G Balong handsets that worked in China. In fact, over 55m/60% of the sales in China were <$400 5G handsets.

This skews the global 5G estimates of sales of about 10m/10% of handsets in 2020.

All the rest had 4G as Qualcomm could not supply the SD765 5G chips that we now see in the OPPO Find X2 Neo/Lite, Moto Edge, LG Velvet and soon many more here.

Apple’s resurgence follows a horrendous time in China. Massive discounts on the iPhone 11-series and the lower-cost iPhone SE have saved face there.

Australia – yet another set of figures

According to IDC, Australia had about 8m new sales in 2019. In 2020 it will be lucky to reach 7m.

According to Statcounter (activations – not sales), Apple has about 3.7m/53% of the market and Android 3.3m/47%.

Australia has traditionally been an Apple stronghold. But almost all of its Q2 share is a mix of iPhone SE (64GB $749) and a huge second-hand and refurbished market. Kantar (consumer sentiment based) said earlier this year that the entire iPhone 11-series was 23.4% of sales.

Samsung has about 25% of the market, and again the Galaxy 4G A-series covering from $249-649 has been its saviour. According to retail sources, buyers are beginning to ask for non-Chinese alternatives.

OPPO has about 4% of sales and the majority are from $239 to $449. Its 5G Find X2 Lite at $749 is picking up sales. Sale of Its 5G Find X2 Neo $899 and the 5G Find X2 Pro at $1599 are slow. With its BBK siblings, it is likely has the second, if not the largest combined Australian smartphone market share. Interestingly any so-called anti-Chinese sentiment evaporates when buyers see the phones and the value they offer.

Google Pixel does remarkably well here with 1.7%, Xiaomi 1.5%, Nokia .67% and Motorola at .48%.

Huawei is clearing the dregs of its 2019 Google Android stock. This is mainly its Y9 Prime for $329 and its P30/Pro that was $1099/1599 for $649/1099. Huawei can no longer load Google Android or its Play store Apps.

Our retail sources state

  • 4G remains the best seller (95%) because 5G (5%) starts at $749 for the OPPO Find X2 Lite
  • 80% of its sales are under $600 and 15% between $700-1000.
  • <$200 is the Nokia 1.3 $169 although the new Moto e6S is catching up
  • <$300 is the OPPO A52 with the Nokia 5.3 and Moto g8 a distant second/third
  • <$400 is the vivo X50 Lite although the heavily discounted LG K61 is doing well
  • <$500 is the OPPO A91 followed by realme 6
  • <$600 is the Samsung A51, but pre-orders for the Google Pixel 4a are really strong
  • <$700 is the Samsung A71
  • <$800 is the realme 4G X3 Superzoom and the OPPO 5G Find X2 Lite. Apple iPhone SE 64GB in the iOS world
  • <$900 – Some interest but few sales of the LG Velvet and OPPO Find X2 Neo
  • <$1000 – ditto and Motorola Edge and vivo X50 Pro

These following price brackets are not in most stores

  • >$1000 – either Samsung Galaxy S/Note20 series or Apple iPhone 11 series. There is interest in the Note20/Ultra since the $200 off promotion.
  • Foldables – curiosity about the Galaxy Fold Z but at $2999 its not a retail product
  • Flip – Interest in the 2019 Moto Razr but any sales convert to the Samsung Galaxy Z flip
  • Gaming – Asus ROG 3

Back to good old Australia

Here are our picks

$200-299 4G

The 4/64GB versions of OPPO A5s ($239), Moto g8 PowerLite ($249 4.2/5), 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 4G

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).

$500-799 4G

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.

$800-999 is now 5G territory

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 4.0/5), 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 (review coming), realme, Xiaomi et al. While it makes 5G more affordable, it is still well over what Australians are spending during COVID.

$1000+

Sales have tanked. It is for those that can afford a lease or business purchase and can deduct it from tax.

MNOs, MVNOs and why 5G sucks

We cannot get accurate statistics but there are hidden gems in annual reports etc. What we know for sure is that there has been a massive swerve away from direct contracts with Telstra, Optus and Vodafone that had about 80% of the market five years ago to roughly 50% today.

The other 50% are mainly consumers that use MVNOs on the three major networks. Overall Telstra has about 40% of mobile services, Optus 30% and Vodafone 20%.

Boost accounts for somewhere between 50-70% (probably closer to the latter) of Telstra’s 4G retail (not 4GX) network and uses Telstra back office and support.

Woolworths is next and appears to have somewhere between 10-20% using the Telstra 4G Wholesale network and supplies its support. Although Aldi is gaining ground there.

Optus MVNOs include Coles, amaysim, Dodo and more.

Vodafone has TPG and some smaller carriers.

But the real issue is coverage. 4G is almost everywhere

Smartphone Q2 2020 4G avail
Smartphone Q2 2020 speed

5G barely makes a dent. OpenSignal data shows about 8% coverage.

Smartphone Q2 2020 5G avail

Speeds are a different story. If you are sitting on a 5G tower you may get

Smartphone Q2 2020 speed

But OpenSignal users report differently – its about the same as 4GX/Plus.

Smartphone Q2 2020 user speed

GadgetGuy’s Smartphone Q2 2020 wrap

We reported on Q2 previously here but not all the figures were available at the time. While we were accurate, the massive sales in China terribly skewed the results.

So your next phone – for at least 95% of you will buy 4G and 80% will spend under $600. There is some amazing value there.