Mobile Devices

Smartphone market recovery happening faster than expected

03 November 2020

While the global market for smartphones declined in the third quarter, the recovery may be rebounding faster than expected, particularly in emerging markets, according to new research from International Data Corp (IDC).

In the third quarter, shipments of smartphones totaled 353.6 million, which is a decline of 1.3% year-over-year. This is far better than IDC’s forecast for the quarter, which was a decline of 9% year-over-year. The faster than expected rebound is largely attributed to the re-opening of economies as COVID-19 restrictions were gradually relaxed.

Additionally, growth was seen in emerging markets such as India, the second largest market globally for smartphones, which saw strong volumes during the quarter despite concerns about the COVID pandemic. Other emerging markets such as Brazil, Indonesia and Russia also experienced strong growth during the quarter.

"Although there was an element of pent-up demand that fueled market growth, it was mainly the array of heavy promotions and discounts that accelerated growth in these markets," said Nabila Popal, research director at IDC. "In India, distance learning has actually boosted the demand for low-end smartphones as they are a more affordable option compared to tablets. The increased low-end demand only further increases competition and adds pressure to the vendors' bottom line."

The largest declines during the quarter were felt in developed markets such as China, Western Europe and North America. However, the fourth quarter may heat up because of the iPhone 12 5G launch and given North America is Apple’s largest region, the market could see an uptick in sales. This iPhone announcement coincides with many 5G promotions happening in regions to push sales for the next generation wireless technology.

"While some of the topline numbers may not seem pretty, we are seeing a lot of improvement in the smartphone market both in terms of supply chains and consumer demand," said Ryan Reith, program vice president with IDC's Worldwide Mobile Device Trackers. "In the large developed markets, it is very clear that 5G will be positioned to most consumers as their next phone regardless of which brand or price point they are focused on. Marketing has ramped up significantly. Products are widely available. Promotions are happening. And it's clear that the top sales initiative in these markets is to push 5G. Having said this, we still believe consumer demand for 5G is minimal at best, which only adds to the price pressure on channels and OEMs."

Samsung reclaims top spot

Among smartphone manufacturers, Samsung Electronics captured the No.1 spot in the market, garnering a market share of 22.7%, shipping 80.4 million smartphones, up 2.9% year-over-year. Samsung’s quarterly growth was the result of significant improvement in the brand in India with a 40% growth year-over-year, IDC said. Additionally, Samsung’s momentum in the U.S. for its A series helped with overall shipments with nearly 20% of total volume in the third quarter.

Huawei, which took the top spot among smartphone vendors in the second quarter, dropped to the second-place position with 14.7% market share or 51.9 million units shipped. IDC said Huawei is facing challenges due to the increasing impact of U.S. sanctions, which is taking its toll on the Chinese brand.

Xiaomi shipped 46.5 million devices for the third position with 13.1% market share. Apple shipped 41.6 million iPhones in the third quarter with an 11.8% market share, dropping 10.6% year-over-year, with the drop due to the delay in the launch of the new iPhone 12 series that usually happens in the third quarter. Vivo rounded out the Top 5 vendors with 31.5 million units shipped with an 8.9% market share. Vivo grew 4.2% in the quarter with massive growth in India of 30% and enhanced brand recognition in China.

The full research can be found in IDC’s Worldwide Quarterly Mobile Phone Tracker.

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