The rebound from 2020 continued for the smartphone market in the second quarter of 2021, with sales volume increasing 13.2% year-on-year, slightly beating IDC’s forecast of 12.5 % growth. According to preliminary data from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, smartphone vendors shipped a total of 313.2 million devices during the quarter, proving once again that this market is returning to sustained growth. All regions contributed to overall growth except China, where the lack of flagship product launches, weaker than expected demand and the continued decline of the Huawei brand caused the market to fall 10% through report for the second quarter of 2020.
The smartphone market has been fortunate enough not to experience the severe supply constraints of the automotive, PC and screen industries, said Ryan Reith, vice president of the IDC Mobile and Consumer Device Trackers program. The pandemic is far from over, but consumers around the world continue to demonstrate their need for mobile devices and their willingness to spend in these categories. Shipments of 5G devices are on the rise, especially as prices fall, but we continue to believe that consumers are not yet shopping specifically for 5G. They buy because they need a replacement device, and in some cases a first smartphone.
With Huawei’s continued decline in shipments and the recent announcement of LG’s withdrawal from the smartphone business, market share is gaining ground. This resulted in significant changes in the market positions of the remaining companies. More specifically, Xiaomi moved up to second position for the first time in the second quarter of 2021, bringing Apple to third. In the markets where Huawei and LG are the strongest (China and the United States, respectively), companies have different chances of gaining this share. In the US, Motorola, TCL and OnePlus have posted year-over-year gains beyond what they have seen in recent years due to LG’s departure. In China, the usual suppliers Xiaomi, OPPO, vivo and Apple continue to benefit from Huawei’s rapid decline.
China’s role in Apple’s incredible growth in recent quarters cannot be denied. Huawei had a significant share in the premium segment in China, and with its massive decline, Apple has remained the best option for consumers in this segment. In the previous quarter (1Q21), Apple had already captured 72% of the> $ 800 segment share in China, with Huawei falling just 24%. This is a clear sign that other players in this market have not exceeded this price segment, said Nabila Popal, research director with Mobile and Consumer Device Trackers at IDC. Globally, all Chinese brands are growing rapidly, with Xiaomi achieving record volume this quarter and year over year growth of 86.6% and more than three quarters of its volume coming from outside from China. As all of these Chinese brands become more concentrated in regions like Europe, Latin America, the Middle East and Africa, competition will only intensify for Samsung and others in these markets.
In the second quarter of 2021, global smartphone sales reached 316.0 million units, down 9% from the previous quarter, as major brands struggled to secure key components to produce devices that meet demand. Samsung was the main supplier with 58.0 million units, an 8% year-over-year growth. Xiaomi took second place for the first time, with 52.8 million units 83% growth. Apple ranked third, growing 1% 45.7 million units, while Oppo and Vivo ranked fourth and fifth with 32.6 million and 31.2 million units, respectively.
Apple has experienced tremendous growth in iPhone revenue, despite a unit total only increasing by 1%.
The big difference here is the iPhone sales mix, said Le Xuan Chiew, research analyst at Canalys. Apple released the low-cost iPhone SE in April 2020, which represented 28% of its mix at the time. This year, without a new iPhone SE, its average selling price has increased significantly. Additionally, its iPhone 12 mini is underperforming the channel’s expectations despite the wholesale discounts, and the iPhone 12 Pro models have become a particularly high mix, 37%. For comparison, last year, iPhone 11 Pro models accounted for 17% of iPhones. Apple, like all brands, will face headwinds in the second half of 2021. But its size carries a significant weight with supply chain partners, and it won’t suffer to the same extent as its smaller competitors. . It also has a material margin to play with, if it chooses to absorb the cost of component price increases, where some of its rivals might be forced to change prices to maintain profitability.
In some regions, the inventory of smartphone channels is dangerously low, said Ben Stanton, research director at Canalys. The big brands already practice regional and channel prioritization to make the most of their limited supplies. As a result, huge internal conflicts have arisen, as regional officials try to secure an allowance. In addition, many suppliers have now also removed sales incentives for a region to exceed its targets, in order to avoid overstretching of supplies. Looking ahead however, as supply constraints ease in 2022, the market is poised to explode. A war has already started, with brands injecting substantial sums into flagship marketing in international markets. Vivo and Oppo have been at the forefront of this dynamic, buying lucrative sponsorships with the Indian Premier League, the World Cup, Wimbledon and FC Barcelona.
Sources : IDC, Canalys