COVID-19 continues to impact the global smartphone market

31 July 2020

COVID-19 is continuing to impact smartphone sales with the second quarter seeing a 15.7 percent unit shipment decline year-over-year, with shipments dropping from 331.8 million units in 2019 to 279.7 million units in 2020.

Of the major OEMs, Apple was most successful in navigating the marketplace. The company expanded shipments by 13.1 percent on the back of its iPhone 11 and iPhone SE products.

Shipping 55.8 million units in the second quarter of 2020, Huawei surpassed Samsung, which shipped 54.3 million units during the quarter for the first time. Helped by the recovery in China, Huawei’s shipments declined by only 4.9 percent compared to the 58.7 million units the company shipped in the second quarter of 2019. Despite facing continued sanctions from the US government, now going into their second year, Huawei has been able to mitigate impacts on its international business enough to compete with Samsung and finally claim the global top spot.

By contrast, Samsung saw shipments decline by 27.7 percent year-over-year (YoY), from 75 million units in the second quarter of 2019 to 54.3 million units in the second quarter of 2020. Many of Samsung’s most important markets were significantly impacted by COVID-19, especially emerging markets which accounted for more than 70 percent of Samsung’s overall shipment in 2019. China is not a large-scale market for Samsung, so the company cannot benefit from the recovery there. In Western Europe, reopening and loosening of restrictions started near the end of the quarter, meaning that much of the first and second quarters were impacted for many of Samsung’s key markets.

Only Apple, iTel, Tecno and Infinix attained positive shipment numbers in the second quarter of 2020, compared to the second quarter of 2019. Apple shipped 39.9 million units, up 13.1 percent from 35.3 million units last year. The iPhone SE, a model with mid-range pricing, and the iPhone 11 helped Apple expand its unit shipments.

“With the launch of the iPhone SE in April, Apple has released a long-desired product, with an attractive price,” said Jusy Hong, director of smartphone research at Omdia. “The launch added a new iPhone model into Apple’s product mix just as lockdown restrictions had reached important markets, such as the United States. A $399 starting price point makes the iPhone SE an attractive new device, especially in the face of continued economic uncertainty in many markets. For existing iPhone users who needed to upgrade their smartphones in the second quarter, the new SE represented an affordable option that does not require a large down payment or high monthly repayment rates.”

The other brands with positive shipments are all part of Transsion Holdings: iTel, Tecno and Infinix. The brands recorded shipment growth of 35.3 percent, 36.9 percent and 17.3 percent respectively, year-over-year (YoY). Transsion Holdings shipped 12.0 million units million units in the second quarter, up from 9.1 million units in the second quarter of 2019.

All three focus on the Middle East and Africa as their main target markets. Because of Huawei’s weakening presence in the market, and the return of production in China at the end of the first quarter of 2020, these three brands were less affected by the pandemic than other brands.

Although many countries have lifted some restrictions on movement and business activities, and others are working towards a return to normal, other countries still continue to be in the midst of the initial outbreak. There are also signs of potential new outbreaks in countries where the virus has been brought under control. In this continued environment of uncertainty, the smartphone market will continue to be impacted in third and fourth quarters of 2020.

While smartphone OEMs have found their footing in terms of releasing new devices and continuing on the path of their product roadmaps, user purchasing behaviour will continue to depend on the strides made in fighting the outbreak and containment of the subsequent threat of new outbreaks.

Author
Neil Tyler