- Thierry Spanjaard
Smartphones sales boom early 2021!
Veterans in the telecom industry have all made their habit of interpreting the sales figures and forecasts published by analysts when it comes to smartphone shipments. However 2021 is a year like no other: while it benefits from the ongoing 5G rollouts, it is affected by the combination between the global health crisis, the semiconductor shortage, the results of US political rulings, and strategic decisions of handset vendors.
From a global standpoint, the first half of 2020 had led to an unprecedented drop in worldwide shipments for smartphones: -13% in Q1/2020 and -14% in Q2/2020. This is now an old story! Q1/2021 has led to a +27% growth level, a figure not seen for years. In Q1/2021, worldwide smartphone shipments reached 347 million units, according to Canalys. The analyst firm evaluates Samsung share at 22%, Apple 15%, Xiaomi 14%, Oppo 11%, Vivo 10% and others 28%.
At the end of the first quarter 2021, everything seemed clear, and as we know that volumes grow linearly along the year, we can even expect that Q4/2021 will beat all time records and this year will be the best in terms of smartphone shipments making us forget the pandemic impact of 2020.
However, other factors clocked in since the end of the first quarter. Globally, the world is undergoing a semiconductor shortage period. Semiconductor cycles have been the object of research for decades: overproduction crisis alternate with shortage crisis in rhythm with the change of technologies. The latest technology is called the 3nm process, and while it has been at research stage for years, semiconductor vendors are now coming up with commercial implementations: since 2019, Samsung, Intel, TSMC have all announced 3nm production plans.
As a side consequence of the semiconductor shortage, LG announced early April it was quitting the smartphone business, after years of struggle to keep up with competition while aiming at profitability. The unit had been said to be up for sale for months and the company has not yet unveiled the details of its activity termination.
Huawei, which on its way to become #1 globally until 2019, saw its marketshare shrink as an effect of the US sanctions decided under the Trump administration, the semiconductor shortage and the fact the company divested from Honor, its entry level smartphone activity, at the end of 2020, under US sanctions pressure. Notwithstanding, Huawei has seen its marketshare in China grow from 59% to 66%, between 2019 and 2020, according to the company itself.
Xiaomi has also been targeted by US sanctions: on January 14th, 2021, in the final week of the Trump administration, the company was put on the Department of Defense’s (DoD) list of “Communist Chinese military companies” (CCMC), thus preventing US entities to deal with them. They sued the US government right away, resulting in a judge qualifying this blacklisting as “arbitrary and capricious.” The sanctions were revoked early May 2021.
The future may not be as bright as the present, especially with the exceptional growth we are experiencing now. IDC just published its forecasts for mobile phones: while they evaluate global mobile phone shipments at 1,651 million units in 2021, they only anticipate a CAGR of 1.3% for the 2020–2025 period. Fortunately, by 2025, everyone will start to be dreaming of 6G ...