Compared to the same period last year, the strategic planning adopted by smartphone brands in response to the collapse of Huawei’s market share is quite different, with production down by as much as 10.1% year-on-year. Looking ahead to 2Q22, with rising inflation intensified by the Russo-Ukrainian war and the direct impact of China’s lockdowns, consumer momentum continues to weaken. Based on current TrendForce observations, global smartphone production volume in 2Q22 is forecast at about 309 million units, roughly equivalent to 1Q22, but the lingering possibility of a downgrade later this quarter cannot be ruled out.
Top five global brands account for 78% of market in 1Q22, Samsung regains top spot
Benefiting from a easing in the supply of low-end 4G processor chips and the launch of its new Galaxy S22, Samsung’s 1Q22 production volume rose to 73.8 million units, ranking first in the world. As for developments in the second quarter of 2022, given that Samsung’s core production sites are located in Vietnam and India and its market share in China is only 1%, it is not disturbed by supply chain turmoil. supply and domestic demand stemming from China’s dynamic zero-COVID policy. However, the impact of the Russo-Ukrainian war worsens in 2Q22. Samsung was originally the leading smartphone brand in Russia, but joined the sanctions against the country in March this year and completely suspended product shipments. Along with rising inflation, Samsung’s production performance in 2Q22 will be affected and is expected to decline compared to 1Q22.
The iPhone 13 series continued to sell well, and the new SE3 helped Apple’s production volume reach 60 million units in 1Q22, achieving excellent performance compared to the same period last year, with a growth rate 11.1% YoY, mainly due to the cannibalization of Huawei’s former high. -End model orders while offsetting losses incurred from the suspension of mobile phone sales in Russia in response to the Russo-Ukrainian war. The Chinese lockdowns negatively affected the operational performance of foundries and the supply chain. Fortunately, Apple was in a transition period between new and old models during 2Q22, and with the second quarter typically seeing the lowest production performance of the year, any collateral impact was relatively limited.
It is worth mentioning that the iPhone 14 series that Apple will launch in 2H22 will feature four new models. Notably, unlike previous offerings, only the latest processors are used in the Pro series. As well as taking into account terminal pricing strategy, this may also highlight differences in market positioning. As rising inflation changes consumer behavior, this type of product positioning is expected to attract more buyers.
The Chinese smartphone market had started to show obvious signs of weakness since the second half of 2021, leading to more cautious quarterly production planning by Xiaomi (including Redmi, POCO, Black Shark), OPPO (including Realme, OnePlus ) and Vivo (including iQoo), with 1Q22 the production volume reached 44.5 million, 40.5 million and 23.5 million units, respectively. Due to the large overlap between the product positioning and planning of these three brands in the sales market, factors such as the late delivery of low-end 4G processor chips earlier in the quarter and slow sales in the Chinese market will directly affect production performance. OPPO and Vivo exhibited a more significant quarterly decline due to their large market share in China. At the same time, the rapid rise of Honor, coupled with its strategy of focusing on the Chinese market as its main sales base, will also threaten Xiaomi, OPPO, and Vivo, which are also focusing on the domestic demand market in China. TrendForce has also noted Honor’s rapid rise in market share and forecasts that its market share in China will overtake Xiaomi’s and close in on OPPO and Vivo in 2022.
5G mobile phones are growing steadily with market share reaching 50% in 2022
According to TrendForce, looking at the performance in 2022 as a whole, 1H22 was mainly influenced by China lockdowns and the Russo-Ukrainian war and 2H22 by the inflation crisis, with an annual production volume of about 1.333 million units. However, if China continues its aggressive zero COVID policy in 3Q22, combined with the double whammy of inflation and power shortages, the global smartphone market may face a further downward revision. Despite continually tightening production targets, 5G mobile phones continue to grow steadily. Since its launch in 2019, 5G mobile phones have benefited from the Chinese government’s diligent promotion of business transformation. In 2021, the global market share of 5G reached 38%. The subsequent growth momentum of 5G mobile phones will be driven by markets outside of China. With the steady increase in global 5G base station coverage, the global 5G mobile phone market share is projected to reach 50% by 2022, or approximately 661 million units, of which Apple owns the majority.
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