IHS Markit 5G Smartphone Whitepaper; Analysts on Samsung’s Feb. 20 Galaxy 10 Launch?

IHS Markit 5G Smartphone Whitepaper:

In a new complimentary white paper, “Substance behind the Hype: 5G Smartphones Primed and Ready for Fast Rollout,”  IHS Markit explores how the global 5G transition is poised to take place at a faster pace than for any previous wireless generation transition.   “It is easy to paint the current momentum behind 5G as the usual pre-launch hype drummed up by vested stakeholders,” said Wayne Lam, principle analyst for IHS Markit and lead author of the white paper. “However, the mobile industry is fundamentally better prepared and more aligned with a common standard than at any previous technology transition.”

Industry uncertainly adds friction to development and discourages firms from making big bets when the outcome is less than certain. While past wireless technology upgrades had competing standards vying for industry attention, there is no doubt about the air interface standard that will be used for 5G. “The 5G electronic ecosystem is significantly more mature, at this point, compared to the same time during the LTE transition,” Lam said. “Key 5G chipsets have been tested, proven and designed into devices, and the industry is now poised to deliver their first 5G smartphone in early 2019.”

“As telecom companies embark on the start of another wireless generation transition, they are doing so with a robust and coordinated ecosystem of carriers, handset makers and component suppliers,” Lam said. “By and large, the industry is finding itself with an unprecedented opportunity to execute a wireless transition in the best position possible.”

To download the complimentary “Substance behind the Hype: 5G Smartphones Primed and Ready for Fast Rollout” white paper from IHS Markit, visit https://cdn.ihs.com/www/pdf/0119/IHSMarkit-Whitepaper_5G-Smartphone_Jan2019.pdf.

Update:  Global smartphone market ends 2018 on downturn
By Gerrit Schneemann, smartphones senior research analyst, IHS Markit; Wayne Lam, mobile devices and networks director, IHS Markit; and Jusy Hong, mobile handset devices director, IHS Markit

Global smartphone shipments recorded a negative year-over-year growth rate in the fourth quarter (Q4) of 2018, for a third consecutive quarter. According to IHS Markit preliminary smartphone data, global smartphone shipments reached 365.2 million units in Q4 2018, which is a 5.7 percent y/y decline. For the 2018 calendar year, shipments declined 2.4 percent compared to the previous year, from 1.44 billion units in 2017 to 1.41 billion units in 2018.

Following is an overview of the smartphone market leaders in 2018, based on unit shipments:

Samsung Electronics

Samsung Electronics maintained its shipment-volume lead, shipping 70.2 million units in Q4 2018. Samsung’s negative growth rate in 2018 continued, as shipments declined 5.5 percent compared to the same quarter of 2017. As a result, its market share fell to 19.2 percent in Q4 2018, which is flat compared to the previous year. Severe competition from Chinese rivals in many regions continued to impact Samsung’s business – and has led to Samsung changing its strategy for how new technologies are deployed in the company’s product range. For example, the first triple-camera Samsung device was a Galaxy A phone and, instead of a Galaxy S device, Samsung released the world’s first quad-camera smartphone – the Galaxy A9 — last year.

Overall Samsung smartphone shipment volume declined 8 percent, falling from 316 million units in 2017 to 290 million units in 2018. This is the first time Samsung shipped fewer than 300 million units in any year since 2014.

Huawei

Huawei shipped 60.5 million units in Q4 2018, rising 47.7 percent, year over year. The company continued its double-digit y/y growth for the fourth consecutive quarter, growing in most of regions, except North America where Huawei has little exposure. Fast growing markets for Huawei include Europe, Middle East and Africa. In 2018, Huawei was able to exceed Apple in unit-based shipments for three consecutive quarters, propelling the Chinese brand to second-ranked position in the market, unseating Apple from its perch. However, the network infrastructure side of Huawei has faced increased scrutiny from the United States and other governments around the world, due to potential security concerns in to roll out of 5G networks.

Apple

Apple shipped 64.3 million units in Q4 2018, down 16.9 percent from 77.3 million units in Q4 2017. The company’s performance faced significant challenges in China and in the overall global smartphone market in Q4 2018. Furthermore, Apple’s super-premium handset pricing seems to have stunted its unit growth potential in the quarter. Importantly, there is no quick fix for Apple to change fortunes in China or India. In China, local competition is fierce; while in India, Apple’s products are ill-equipped to fit into the country’s price-cautious market.

Xiaomi

The recent trend of high double-digit growth halted for Xiaomi in Q4 2018. The company shipped 24.8 million units, down 12.1 percent from 28.2 million units in Q4 2017.

Oppo and Vivo

Oppo and Vivo shipped 26.4 and 25.2 million units, respectively. Oppo shipments declined 3.6 percent, while Vivo shipments grew 7.2 percent.

Conclusions

Xiaomi, Oppo and Vivo were adversely affected by the continued negative growth of the smartphone market in China. On the other hand, Huawei strengthened its market leadership in China. Tension between the US and China stimulated a feeling of patriotism in China, leading smartphone users to choose Huawei over other brands. Moreover, Huawei boasts significant international business – which other brands are still working to establish – enabling the company to achieve tremendous success in the fourth quarter.

The combined market concentration on the top six companies continued to intensify in Q4 2018, accounting for 75 percent of global smartphone shipments. Most of the rest brands saw their shipments and market shares fall in the quarter.

Meanwhile, Nokia increased its shipments to 15 million units in 2018, up from 5 million units in the previous year. Finland-based HMD Global is operating its Nokia-branded smartphone business, by focusing on mid-range and low-end smartphones in Europe, Asia and Africa. The company will soon expand into North America.

Quarterly Global Smartphone Shipments (Millions of Units)

    Q4-18 Q3-18 Q4-17 QoQ YoY
Rank   Shipments M/S Shipments M/S Shipments M/S    
1 Samsung

70.2

19%

70.9

20%

74.3

19%

-1%

-6%

2 Apple

64.3

18%

46.9

13%

77.3

20%

37%

-17%

3 Huawei

60.5

17%

52.0

15%

41.0

11%

16%

48%

4 Oppo

26.4

7%

31.2

9%

27.4

7%

-15%

-4%

5 vivo

25.2

7%

28.9

8%

23.5

6%

-13%

7%

6 Xiaomi

24.8

7%

33.3

9%

28.2

7%

-26%

-12%

7 LG

11.1

3%

11.6

3%

13.9

4%

-4%

-20%

8 Motorola

10.1

3%

10.7

3%

11.4

3%

-6%

-11%

9 TCL-Alcatel

4.5

1%

5.7

2%

4.8

1%

-21%

-5%

10 Nokia

4.2

1%

4.5

1%

4.4

1%

-7%

-5%

  Others

63.3

18%

59.9

17%

81.3

21%

6%

-22%

  Total

365.2

355.6

387.4

3%

-6%

Source: IHS Markit – Smartphone Intelligence Service

© 2019 IHS Markit

Global Smartphone Shipments (Millions of Units)

Rank Company 2018 2017 YoY
1 Samsung 290 316 -8%
2 Huawei 206 153 35%
3 Apple 205 216 -5%
4 Xiaomi 120 92 30%
5 Oppo 115 118 -2%
6 vivo 104 95 9%
7 LG 45 56 -19%
8 Motorola 39 38 3%
9 TCL-Alcatel 17 21 -18%
10 Nokia 15 5 175%
  Others 254 334 -24%
  Total 1,410 1,444 -2%

Source: IHS Markit – Smartphone Intelligence Service

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About IHS Markit (www.ihsmarkit.com)

IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.

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Analysts Weigh-in on Samsung’s Feb. 20 Galaxy 10 Launch?

Avi Greengart, a mobile device analyst with GlobalData, said a big challenge with every new phone model release for Samsung and other vendors is that as phones have matured, users are holding onto their phones longer.

“As much as Samsung needs to compete with Apple, it needs to compete with the phone consumers already have – the S10 needs to be a phone that entices existing Android phone owners to upgrade,” Greengart told eWEEK. “We know what phones are and what they do – no single new feature is likely to be groundbreaking. However, design is definitely an area of focus; Samsung was actually the first vendor with an edge-to-edge display, but now that’s not enough.”

The new phones will almost certainly include 5G capabilities for each of the major mobile carriers’ networks as they come online, but more will be needed to make a sales impact, he said.

“There is a tricky balance that Samsung must hit – it needs radical designs and bleeding edge technologies like folding displays and 5G that push the envelope for early adopters, but it also must make more traditional 4G phones exciting enough to entice mainstream consumers to upgrade as well,” Greengart said. “It’s not enough to just cram massive amounts of technology into the phone for the wealthiest consumers. In the U.S., the competition really is focused around Apple and Samsung, but in Europe and Asia, Chinese brands like Honor and Xiaomi are attacking Samsung with premium phones at lower price points.”

Charles King, principal analyst with Pund-IT, agreed.  “At this point, Samsung is one of the two to three phone makers that can and do fight Apple to a draw,” King told eWEEK. “With phones like Samsung’s [current] Galaxy S9, it really comes down to the buyer’s operating system and applications preferences. That’s a significant contributor to Apple’s overall slowdown in iPhone sales growth over the last few months.”

For buyers, solid and noticeable improvements in cameras and displays in newer phones can help Samsung inspire more sales of its latest handsets, while a larger issue for many customers are the high prices of the devices, King said.  “I believe the emergence of $1,000 handsets last year clarified the ceiling of what the vast majority or consumers will pay for a smartphone.  So it’s important for Samsung to either deliver significant, compelling new features or performance capabilities, or to show greater flexibility in pricing.”

Tuong Nguyen, an analyst with Gartner, said a big issue that Samsung and other handset makers have to deal with when releasing new models nowadays is that for buyers, it’s tough to differentiate because all the major vendors have large screens, plenty of storage and all the rest.

For Samsung and other smartphone makers, there are no current “must-have” features that can be included in a handset to assure huge resulting sales of the phones, he said. “I think there are numerous features that are compelling, but they need to improve and come together in a way that increases the value proposition of smartphones in a significant way.”

What could boost sales for a phone would be the ability to use a smartphone as a hub or centralized device so users could control different aspects of their tech lives without having to open multiple apps or make other adjustments, Nguyen said. “I would categorize all this under learn, predict, surprise and anticipate. This is the type of step change we need to drastically attract users,” Nguyen said.

Another analyst, Rob Enderle, principal of Enderle Group, told eWEEK he expects the new Samsung flagship devices to include 5G, a bump in performance and features such as battery life and camera quality, as well as enhancements in wireless charging–including a rumored feature that enables the phone to charge another device wirelessly at the same time.  What Samsung will have to try to overcome, though, is that because wide deployments of 5G is still more than a year away many users may be satisfied to hang on to their existing handsets for now, Enderle said.

“Smartphones have been really good for years now, and the natural need to replace them has dropped sharply over time,” said Enderle. “In the current period, this behavior is likely more directly related to a reduction in effective demand-generation.”

https://www.eweek.com/mobile/can-we-expect-5g-at-samsung-s-feb.-20-galaxy-10-launch

 

4 thoughts on “IHS Markit 5G Smartphone Whitepaper; Analysts on Samsung’s Feb. 20 Galaxy 10 Launch?

  1. Global smartphone market declined for first time in 2018
    The fourth quarter smartphone shipments for 2018 recorded a decline of 7 per cent, marking it the fifth consecutive quarter of smartphone decline.

    The overall global smartphone market declined for the first time in 2018, registering 4 per cent drop from 1,558.8 million unit shipments in 2017 to 1,498.3 million units 2018, Counterpoint Research said on Thursday.

    https://telecom.economictimes.indiatimes.com/news/global-smartphone-market-declined-for-first-time-in-2018/67769497

  2. Strategy Analytics’ latest report, Smartphone Country Share Tracker (CST) service, showed China’s smartphone shipments tumbling 11% in the last quarter of 2018 to reach 108 million units.

    According to Neil Mawston, executive director of wireless device strategies at Strategy Analytics, the Q4 decline is in stark contrast to the 121 million units shipped in the same quarter in 2017. He attributes this drop to what he dubbed a recession in the smartphone market that saw five consecutive quarters of decline.

    “The smartphone market is suffering from longer replacement cycles and weak consumer spending. The past year has been exceptionally tough and one the smartphone industry will want to forget,” he commented.

    On the bright side, Huawei shipped 30 million smartphones capturing a record 28% share of the China market last quarter. With an annual growth of 23%, it is now the clear market leader added Mawston. He attributes this performance to “a strong product portfolio, famous brand and extensive retail channels.”

    OPPO took the second spot with 21% share of the smartphone market in the aforementioned quarter. Despite a shipment drop of 2% annually, OPPO continues to grow faster than average. Huawei is piling pressure on OPPO in mid-tier and offline retail channels across major cities such as Shanghai. OPPO is trying to fight back, by targeting more online channels with improved models such as the K series.

    In the third spot is VIVO 21% share and very close to overtaking OPPO. Vivo’s 8% annual growth rate is bettered only by Huawei. Vivo is growing online with the Z series, and launching more premium models from its NEX range that aim to differentiate by tech innovation said Strategy Analytics.

    Apple isn’t doing too well in China lately. While it performed better than Xiaomi, overtaking the local brand with 10% smartphone market share in China in Q4 2018, iPhone shipments dropped 22% annually – the worst quarter for the American icon since early 2017. Apple iPhone sales have now fallen for 8 of the past 12 quarters. Mawston says Apple is in danger of pricing the iPhone out of China.

    On January 2, 2019, Apple CEO Tim Cook wrote to investors revising downward the company’s revenue guidance for its first fiscal quarter to $84 billion from $93 billion blaming the iPhone’s soft performance squarely on China. He attributes a weaker-than-expected Chinese economy and the ongoing trade problems with the US as mitigating factors.

    Xiaomi rounded the top 5 with 9% share of the market in Q4 2018. Its previous strong growth in its home market has been halted slumping 35% annually. Xiaomi suffered from overstocked channel inventories, plus intensified competition from rivals Huawei and Vivo.

    https://www.strategyanalytics.com/access-services/devices/mobile-phones/handset-country-share/reports

  3. India smartphone shipments grew a healthy +10% YoY during the fourth quarter of 2018. Innovative competition among operators and devices makers in festival season drove the uptick. India is a rare island of growth in a global sea of slowdown. Xiaomi and Realme were the star performers, while Micromax continued its recent recovery.

    https://www.strategyanalytics.com/access-services/devices/mobile-phones/handset-country-share/reports/report-detail/realme-soars-in-india-smartphone-market-during-q4-2018

  4. From Ready or not, 5G will probably be the death of these 3 smartphone companies by David Ruddock:

    5G is expected to far outstrip 4G in terms of cost to carriers in deploying the necessary technology and equipment to get networks online. That cost will fall on consumers and partners as operators attempt to recoup their large capital expenditures over the coming years. That means carriers will want higher prices on 5G phones and lean inventory, in order to offset the risk inherent with any first-generation technology. Because carriers will be demanding 5G handsets – oftentimes in the form of operator exclusives – LG, HTC, and Sony will almost assuredly bet the farm on 5G to reverse their failing fortunes. And equally assuredly, I believe, it will be unable to do so.

    Developing a 5G handset will be an expensive proposition. An entirely separate, discrete modem – only available from Qualcomm, meaning they get to pick a price without consideration to competitors – will be required for these first-generation handsets, and possibly beyond, depending on the exact implementation. New antennas and industrial design to support technologies like millimeter wave will be necessary, putting significant engineering costs into smartphones that manufacturers haven’t had to deal with much since LTE become relatively standardized almost a decade ago. There is also a strong chance that these first 5G phones will be… very bad. Battery life and connection reliability are major concerns, and there’s a real sense that 5G won’t be deployed in a significant enough sense for most people to even use it for years.

    For companies like Samsung, Apple, and Huawei – this isn’t really a problem. All of them sit on such vast piles of cash that they can afford for 5G phones to be not-very-good and sell not-very-well for a good long while. Meanwhile, their profitable 4G phone businesses will continue, in all likelihood, to be profitable – just less so. LG, Sony, and HTC can’t afford to be more unprofitable than they are – that’s a fast-track to failure. And yet, they’re all too likely to rush headlong into death, because 5G represents their first chance in years to potentially disrupt the market and stand out among competitors. Make no mistake: 5G is make or break for these three companies, and there is absolutely no good reason to think it will do anything but break them. Disruptive momentum in the smartphone world is at historical lows – successful companies are becoming slightly less successful, but failing ones are failing at a greater level – and there has been no credible argument offered suggesting that 5G will change this trend. If anything, it will amplify it: the companies that can afford to absorb the tremendous R&D, supply chain, and marketing costs necessary to sell 5G devices will be able absorb them. Their competitors will not. This is not complicated, nor should it be controversial: it’s logic.

    When will LG, Sony, and HTC finally give up the ghost? Your guess is as good as mine. I expect HTC will be toppled first, as its financial situation is the most dire, followed by Sony shortly thereafter (or, at least, a retreat to its domestic Japanese market, allowing it to avoid the shame of a total exit from the business). LG will likely trudge onward for some time, but its poor performance in the market is undoubtedly a source of immense frustration for executives at an otherwise very successful brand. Cutting the failing mobile division loose would allow LG to focus on the areas where it is dominant or, at least, competitive, and avoid the embarrassing, almost ritualistic quarterly write-down of the smartphone division’s losses.

    In a way, 5G will disrupt the mobile industry – by eliminating even more players from the board. Some may argue it was long overdue, but the consolidation of market power into an ever-smaller group of companies rarely bodes well for consumers. Let’s hope, for once, that historical trend is bucked.

    https://www.androidpolice.com/2019/02/01/ready-or-not-5g-will-probably-be-the-death-of-these-3-smartphone-companies/

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