As we near the all-important holiday sales period, new figures from Gartner suggest some recovery in the smartphone market as vendors launch a range of new 5G phones. The smartphone figures published today for the third quarter showed that sales of smartphones worldwide fell by 5.7% to 366 million units compared to the same period last year. Yes, it's a decline, but it's still a significant improvement over the first half of this year, when sales fell 20% each quarter, largely due to the impact of Covid-19 on spending and overall consumer confidence is.
In terms of brands, Samsung continued to lead the total units with 80.8 million units and a market share of 22%. In fact, Korean mobile phone maker and Chinese company Xiaomi were the only ones in the top 5 to see revenue growth of 2.2% and 34.9%, respectively, for the quarter. Xiaomi's numbers were strong enough to overtake Apple for the quarter and become number three in terms of overall sales rankings. Huawei was just holding onto number two. For more information, see the full table later in this story.
Also worth mentioning: total cell phone sales – a figure that includes both smartphones and feature phones – fell by 8.7% to 401 million units. This underscores not only how few feature phones are currently being sold (smartphones can often even be cheaper to buy depending on the brand or carrier bundle), but also that these less sophisticated devices have even more selling pressure than more advanced models.
Smartphone break-in: it's not just Covid-19
It is worth remembering that smartphone sales were growing more slowly even before the global health pandemic. The reasons: After a period of great enthusiasm among consumers for the collection of devices, many countries achieved market penetration. And then the latest features were too incremental to make people sell and pay a premium for newer models.
In this context, the big hope of the industry was 5G, which was marketed by both cellular operators and cellphone manufacturers with more data efficiency and speed than older technologies. However, if you look at the broader roadmap for 5G, the rollout has been inconsistent and, by and large, consumers are still not entirely convinced they need it.
In the past quarter in particular, there is still evidence that emerging / developing markets continue to have an impact on growth – as opposed to new features that are drivers in permeated markets.
“Some markets, including parts of mature Asia / Pacific and Latin America, are showing the first signs of recovery. Near-normal conditions in China improved smartphone production to fill the third quarter supply gap, which in part benefited sales, ”said Anshul Gupta, Gartner's senior research director, in a statement. "For the first time this year, smartphone sales to end-users increased 9.3%, 8.5% and 3.3%, respectively, in three of the top five markets i.e. India, Indonesia and Brazil."
The more positive Q3 numbers coincide with a period this summer when new Covid-19 cases slowed in many places and many restrictions were relaxed. All eyes are now on this upcoming vacation period, at a time when Covid-19 cases have occurred with all might and (still) without the introduction of large-scale vaccination or therapy programs. This inevitably affects the economy.
"Consumers are limiting their discretionary spending, although some lockout conditions have gradually improved," said Gupta of the Q3 numbers. “Global smartphone sales showed moderate growth from the second quarter of 2020 to the third quarter. This was due to the pent-up demand from the previous quarters. "
Samsung held on to the top positions, even though growth was significantly less strong in the quarter. Fortunately for Samsung, there is still a long way to go. This is in part because the second largest Huawei, with 51.8 million units sold, has fallen more than 21% since last year after being banned in the US and phased out in the UK on allegations that its equipment was being used by China is used for spying.
It will be interesting to see how Apple's small drop from 0.6% to 40.6 million units shifts to Xiaomi's 44.4 million units in the next quarter as the company launches a new line of iPhone 12 devices Has.
"Apple sold 40.5 million units in the third quarter of 2020, a decrease of 0.6% from 2019," said Annette Zimmermann, research vice president at Gartner, in a statement. “The slight decrease was mainly due to Apple's delayed shipping start for the new iPhone generation 2020, which in previous years always began in mid / end of September. This year, the kick-off event and shipping started 4 weeks later than usual. "
Oppo, which is still not available in the US through wireless carriers or retail partners, rounded out the top 5 sellers with nearly 30 million phones sold. The fact that it and Xiaomi do so well despite not having a real phone presence in the US is interesting evidence of the role the US plays in the global smartphone market: huge in terms of perception, but perhaps less when the chips are down.
"Others" – this category, which can take on the long tail of gamers who make phones, remains a huge force that generates more sales than any of the top 5. This highlights the fragmentation in the Android-based smartphone- Industry, but still the collective numbers were in decline, a sign that consumers are actually slowly consolidating around a smaller group of trusted brands.
|Market share 3Q20 (%)||3Q19
|Market share 3Q19 (%)||3Q20-3Q19 growth (%)|
Source: Gartner (November 2020)