Source: Electronic Engineering Album, thank you
China has great potential in the high-end smartphone market. Counterpoint believes that in 2023, China's smartphone shipments will recover to more than 280 million units. The high-end sector is expected to outperform, up nearly 5% year-on-year.
Edit: Perceptual Core Vision
According to Counterpoint's latest research, the global smartphone market faced further contraction in the post-holiday quarter, with shipments falling 14% year-over-year and 7% sequentially to 280.2 million units in the first quarter of 2023.
The top five smartphone brands in Q2 2021-Q1 2023 are mainly Samsung, Apple, Xiaomi, OPPO, and vivo occupy the main market, but data from a number of research institutions show that after the loss of Huawei, the market share of Chinese smartphone brands has declined year by year, and Xiaomi has fallen from the second place in the world in Q2 2021 to the third place in Q1 2023.
According to Counterpoint data, in Q2 2021, the market shares of Xiaomi, OPPO and vivo were 16%, 10%, and 10%, respectively, falling to 10%, 8%, and 7% in Q1 2023, Samsung ranked first in the global smartphone ranking with a 20% market share, and Apple ranked second with a market share of 19%.
Source: Counterpoint
According to Canalys, global smartphone shipments fell 13% to 269.8 million units in the first quarter of 2023. The global smartphone ranking is the same as Counterpoint's, but the market share is different. Canalys pointed out that in the survey, Xiaomi's subsidiary POCO and OPPO's subsidiary OnePlus were included in the calculation.
According to Canalys data, the top five smartphone brands in the world are Samsung (22%), Apple (21%), Xiaomi (11%), OPPO (10%), vivo (8%). Among them, Xiaomi's smartphone market share accounted for the largest year-on-year decline of 22%, followed by Samsung, vivo, OPPO, Apple maintained a 3% growth under weak market demand, becoming a highlight of Apple's performance in the company's revenue. However, Apple's iPad and Mac business revenue declined.
How to do well in India? Offline channels are key
Canalys analyst Runar Bjørhovde pointed out that Apple was able to perform strongly in the first quarter, especially in the Asia-Pacific region, mainly due to Apple's continued investment in offline channels, which allowed it to attract the emerging middle class.
Canalys' research shows that the Indian smartphone market saw a 20% year-on-year decline in Q1 2023 shipments for the first time, though they remain bullish on its long-term prospects.
Apple CEO Tim Cook personally presided over the opening of India's first Apple store in April. Apple's first store in India is located in a luxury shopping mall in Mumbai, with an area of 20,000 square feet (about 1,858 square meters).
Apple said in a statement that the opening of its flagship store in India will be an "important expansion" for the company's business in India. Cook said he sees huge growth opportunities as India expands its middle class. Cook believes the country is at a "tipping point."
As Apple's iPhone users become increasingly saturated with the smartphone market, the Indian market has become Apple's next big strategic priority.
According to Counterpoint data, during 2021Q4-2023Q1, the top five brands occupying the Indian smartphone market are Samsung, vivo, Xiaomi, OPPO, and realme.
After India's "bad" suppression of Chinese mobile phone brands, including Xiaomi, OPPO, vivo, ZTE and other mobile phone brands have been investigated and seized funds and tax issues, Xiaomi's market share has fallen from 21% to 16%, and realme has fallen from 17% to 9%.
In a competition, vivo became the leading brand in the affordable premium segment of India (INR 30,000 – INR 45,000, about USD 370-550). OnePlus is the fastest-growing brand in this market, followed by Apple. Apple's offline channels grew strongly and continued to lead the premium and ultra-premium markets.
Source: Counterpoint
Recently, due to the complex business environment in India, the ODM manufacturer Wistron will withdraw from the Indian market as soon as 2024. Wistron's iPhone assembly plant in Karnataka, South India, will be acquired by India's Tata Group for 50 billion rupees (about 4.195 billion yuan).
Once the deal is struck, Tata Group will be the first company in India to produce iPhones. In 2022, Tata also entered into a cooperation agreement with Wistron to increase Wistron's iPhone production in India by 5 times.
Not only Wistron, but also Foxconn and Pegatron are also actively expanding cooperative production capacity in India. In addition, Apple's new offline store is also the key to further enhancing its brand experience and status.
Canalys analyst Sanyam Chaurasia said, "The first quarter of 2023 shows that brands must balance channel contributions to keep business operations stable and maintain share. Suppliers with efficient channel management have proven to be more resilient to market volatility.
Post-pandemic, suppliers nurturing mainline retail channels have shown stability even during market downturns. The increasing contribution of high-priced models encourages suppliers to focus on strengthening their offline channels.
Samsung's fast-moving model placement in offline space is very effective. This quarter, it is the new 5G-enabled A-Series. Apple's new offline stores with professional staff will further enhance its brand experience and position. Big online brands, on the other hand, drive sales mainly through e-commerce sales, leading to cyclical sales surges. ”
Now, is China's smartphone market really inferior to India's?
According to Counterpoint Research's market monitoring services, smartphone shipments in Latin America declined 9.9% year-over-year in the first quarter of 2023. The European smartphone market saw a 23% year-over-year decline in shipments in the first quarter of 2023, the worst quarter for smartphone shipments in the region since the second quarter of 2012.
U.S. smartphone shipments declined 17% year-over-year in the quarter as OEMs corrected high channel inventories and consumer demand declined due to macroeconomic pressures.
India's smartphone shipments fell 19% year-on-year in the first quarter of 2023 (January-March) to more than 31 million units, the largest decline in the Indian smartphone market in the first quarter ever, and the third consecutive quarter of decline.
Smartphone sales in China fell 5% year-on-year in the first quarter of 2023, reaching the lowest first-quarter sales figure since 2014.
According to Canalys, the smartphone market fell 11% year-on-year in the first quarter of 2023 Chinese mainland with shipments falling to 67.6 million units, the lowest since Q1 2013.
More and more people are beginning to question the potential of China's smartphone market? According to Counterpoint data, China's smartphone sales revenue in 2022 was only 11.7% lower than in 2016, but shipments fell by 41.5% in the same period.
The average selling price of smartphones in China has increased every year since 2014. In 2022, the ≥US$500 (retail price of nearly RMB4,000) segment accounted for more than 26% of total sales in China, up from 11% at the height of market shipments in 2016.
China has become the world's second largest high-end smartphone market (nearly 70 million smartphones sold over 4,000 yuan in 2022).
Although China's smartphone shipments in 2022 fell year-on-year, it was the lowest in nearly a decade. The Chinese market still accounts for 22.6% of global shipments, well above India's 12.4% in second place.
Since 2015, Chinese smartphone brands Xiaomi, OPPO, and vivo have been growing year by year. After reaching the highest market share of 14% in 2018, Huawei's market share has shrunk year by year to less than 2% in 2022. After the boom ended, the market also ushered in more fierce competition, and OEMs paid more attention to product differentiation.
However, China has great potential in the high-end smartphone market. Counterpoint believes that in 2023, China's smartphone shipments will recover to more than 280 million units. The high-end sector is expected to outperform, up nearly 5% year-on-year.
By 2035, both the average selling price of smartphones and the share of high-end smartphones ($≥500) will rise to the next level. High-end smartphones will account for nearly 40% of the total market.
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