Market decline

Apple becomes the only smartphone maker to grow amid falling market

According to research firms IDC and Canalys, iPhone deliveries increased in the last quarter, the only positive point in an otherwise austere smartphone market.

Image: Apple

Apple was the only smartphone vendor to thrive in the second quarter amid the damaging economic side effects of the coronavirus pandemic. Considering the global smartphone arena, global shipments fell 16% to 278.4 million according to IDC and 14% to 284.7 million according to Canalys.

SEE: IT Policy on Mobile Devices (TechRepublic Premium)

Although larger than that of the first quarter, the decline was expected as countries around the world entered lockdown mode due to COVID-19. Specifically, IDC indexed the second quarter decline to a few factors related to the virus.

“Smartphone shipments suffered a huge drop in the second quarter as they are directly linked to consumer spending, which suffered a massive reduction due to the global economic crisis and rising unemployment caused by widespread lockdowns,” Nabila Popal, research director at IDC Worldwide Mobile Device Trackers, said in a press release.

“This, combined with the closure of retail stores, especially in regions where online shopping is less common, has compounded the negative effect on smartphone sales,” Popal added. “In addition, consumers have spent heavily on other technologies, such as PCs, monitors and tablets, to facilitate compulsory homework and distance learning, leaving an even smaller share in the portfolio of consumers down for smartphones. “

smartphone-expeditions-2020-q2-idc.jpg

Image: IDC

In the face of the general slowdown, Apple saw its iPhone shipments and market share increase during the quarter. Shipments rose 11.2% to 37.6 million, giving the company a 13.5% market share, according to IDC data. Canalys’ estimates for Apple were even higher, indicating a 25% gain in shipments to 45.1 million with a market share of 15.8%.

Both companies attributed Apple’s growth to the continued popularity of the
iPhone 11

series and the launch of the 2020 iPhone SE. The new SE has satisfied the demand for lower-cost phones at a time when consumers are looking for more budget options. Apple has also overcome some of the bumps of the COVID-19 crisis by improving the digital experience for customers, as the lockdown has forced smartphone buyers to turn to online resources.

“Apple defied expectations in the second quarter,” Canalys analyst Vincent Thielke said in a press release. “Its new iPhone SE was key during the quarter, accounting for around 28% of its global volume, while the iPhone 11 remained a strong bestseller at almost 40%. The iPhone SE will remain crucial to sustaining volume this year, despite delays in Apple’s next flagship release. “

smartphone-expeditions-2020-q2-canalys.jpg

Image: Canalys

For the first time in a quarter, the Chinese Huawei overtook Samsung to take the first place in the smartphone market. By capitalizing on China’s resurgence after its fight against COVID-19 earlier this year, the company was able to meet consumer demands in the world’s largest smartphone market. While its shipments actually fell 5%, that was a smaller drop than most other phone makers felt. But Huawei will face increased pressure in the global market due to sanctions in the United States and elsewhere and the lingering suspicion that the company poses a security threat.

Stripped of its No.1 title, Samsung saw its smartphone shipments drop by about 30% in the second quarter. While the company’s A-series of smartphones have continued to do well, more high-end devices such as the
Galaxy s20

and the
Galaxy z flip

suffered from bad timing during their deployment at the height of the pandemic.

Shipments from Xiaomi and OPPO, the other two major Chinese smartphone suppliers, also fell in the last quarter. Xiaomi has suffered from declining sales in China and India, the effects of the lockdown and anti-Chinese sentiment in India. OPPO has been affected by supply and demand issues with plant closures as well as the current anti-China attitude.

Going forward, smartphone vendors will need to adjust to the “new normal” of the pandemic, according to IDC senior analyst Ben Stanton. Although several countries have allowed the reopening of retail stores, customer traffic has remained low.

“Going forward, vendors will need to shift channel focus in the short term to accommodate second wave outbreaks,” Stanton said. “In addition, geopolitical uncertainty hangs over the global smartphone market. Countries are polarizing between the interests of the United States and China. Smartphone sellers need to act, and many are already directing funds to brand marketing to highlight their positive impact in a local region. . “

What about 5G? Under normal conditions, the rollout of more phones and 5G networks would give the smartphone industry a boost. But, as the virus continues to endure amid lockdowns and weak economic conditions, buyers may resist spending money on new phones, even with the allure of 5G.

“The question now becomes what demand looks like with so much uncertainty in the world,” said Ryan Reith, vice president of IDC Worldwide Mobile Device Trackers, in a press release. “We’ve already seen OEMs evolve more aggressively with their 5G wallets, both in terms of production and price. However, we still find that consumer demand for 5G is low, so the push on the supply side is likely to produce very high price competition. “

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