Huawei’s comeback: 2023 revenue approaches $100B with smart devices gaining ground

Huawei  expects to report revenue exceeding 700 billion yuan ($98.5 billion) for 2023, according to comments from rotating deputy chairman Ken Hu in an internal new year message seen by Reuters.

Mr. Hu Houkun (Ken Hu), Huawei’s deputy chairman                              Photo Credit: Huawei

That optimistic forecast offers further evidence that Huawei is rebounding after U.S. sanctions starting in 2019 crippled some of its business lines by restricting access to critical global technologies such as advanced chips.

“Thanks to our partners across the value chain for standing with us through thick and thin. And I’d also like to thank every member of the Huawei team for embracing the struggle – for never giving up,” Hu said.

“After years of hard work, we’ve managed to weather the storm. And now we’re pretty much back on track.”

“In 2023, we expect to wrap up the year with over 700 billion yuan [US$98.9 billion] in revenue,” he added.   That would be a 9% increase on sales from 2022, when the comparable rate of global telecom revenue growth was less than 1%.

Indeed, 2023 has been a very difficult year for telecom network equipment makers such as Ericsson and Nokia.  Ericsson’s revenues for the first nine months fell 7% on a constant-currency basis. Nokia’s were down 3%.

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What sectors might be responsible for the 9% sales growth Huawei expects this year? From the first paragraph of Ken Hu’s commentary.

“Our ICT infrastructure business has remained solid, and results from our device business surpassed expectations. Both our digital power and cloud businesses are growing steadily, and our intelligent automotive solutions have become significantly more competitive.”

Huawei’s improvement might be due to the upbeat performance of its devices business which includes smartphones and smartwatches. In 2020, the company’s consumer unit accounted for about 54% of all Huawei’s revenues, but its sales halved the following year. It was badly hurt by sanctions because smartphones have a greater need than networks do for advanced chips. Huawei was also cut off from Google software that runs on other Android smartphones. Its response to all this included the sale of Honor, a big smartphone subsidiary.

This past August, Huawei launched its Mate 60 series of smartphones, which are believed to be powered by a domestically developed chipset. The release was widely viewed as marking Huawei’s comeback into the high-end smartphone market after years of struggling under U.S. sanctions.

Huawei’s smartphone shipments surged 83% in October year-on-year, helping the overall Chinese smartphone market to grow 11% over the same period, according to Counterpoint Research which wrote:

Huawei’s success and climb in the rankings has been helped by the recent launch of its Mate 60 series 5G phones and popularity of its older P-series 4G devices.  “The company is posting some very good growth numbers, but obviously there’s base effects happening,” notes China analyst Archie Zhang.  “We expect it will grow by more than half this year, but that still doesn’t bring them close to pre-COVID levels. But it’s signalling a promising 2024.”

Huawei’s smartwatch business is doing very well. Counterpoint’s Woojin Son wrote:

“There is significant value in examining the growth drivers of the global smartwatch market in Q3 2023. Amid a global economic slowdown, most consumer device markets like smartphones are still experiencing stagnation compared to a year ago. In contrast, the smartwatch market has recorded YoY growth for two consecutive quarters in both premium and budget segments. Notably, High-level Operating System (HLOS)* smartwatches, typically featuring higher specification and price, have grown largely driven by Huawei in Q3 2023 as the company posted its highest quarterly performance ever. Most of this surge occurred in the Chinese domestic market, coupled with the launch of new Huawei 5G smartphones.”

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Looking ahead to 2024, Huawei said in the letter the device business would be one of the major business lines it would focus on for expansion. “Our device business needs to double down on its commitment to developing best-in-class products and building a high-end brand with a human touch,” the letter said.

Missing from Hu’s remarks was any reference to Huawei’s profits, which plummeted 69% last year, to just RMB35.6 billion ($1 billion).

Huawei watchers will probably have to wait until the publication of its 2023 annual report for an update. For sure, the company is cutting costs.  “We will continue to streamline HQ, simplify management, and ensure consistent policy, while making adjustments where necessary,” said Huawei’s chairman.

Yet the company will likely continue to ramp up R&D spending. RMB161.5 billion ($22.8 billion) was spent on R&D in 2022, about a quarter of total revenues and a 13% year-over-year increase. Expect a similar increase for 2023 and 2024.

References:

https://www.reuters.com/technology/huawei-forecasts-9-revenue-growth-2023-smartphones-surge-2023-12-29/

https://www.lightreading.com/smartphones-devices/huawei-hails-9-sales-growth-as-ericsson-and-nokia-shrink

Top 5 Smartphone Models Share For 8 Countries

Singles Day Growth Boosts Odds of China Market Smartphone Recovery in Q4 2023

Global Smartwatch Market Rebounds; Huawei and Fire-Boltt Hit New Peaks

Huawei reports 1% YoY revenue growth in 3Q-2023; smartphone sales increase in China

Huawei reported a flat third quarter, with sales of 145.7 billion Chinese yuan ($19.9 billion), up just 1% over last year and a net profit margin of 16.0%.   The Shenzhen based telecom equipment and mobile phone vendor said the profit margin had been boosted by the latest tranche from the sale of the Honor handset assets three years ago.  It said improved efficiencies and optimized sales and product strategies had also had a positive impact on profitability.

“The company’s performance is in line with forecast,” said Ken Hu, Huawei’s Rotating Chairman. “I’d like to thank our customers and partners for their ongoing trust and support. Moving forward, we will continue to increase our investment in R&D to make the most of our business portfolio and take the competitiveness of our products and services to new heights. As always, our goal is to create greater value for our customers, partners, and society.”

Huawei reported growth in the consumer business unit and “strong growth” in the new digital power and cloud businesses, but the company was silent on its carrier equipment unit, its largest, suggesting it has also been hit by the decline in operator spending.

Huawei smartphone summary:

Huawei was the fastest-growing smartphone maker in China in the third quarter after the company released a smartphone with a surprisingly advanced chip inside.

  • In September, Huawei launched the Mate 60 Pro in China. It’s equipped with an advanced chip and 5G connectivity, technology that U.S. sanctions had been designed to stop Huawei getting its hands on.
  • The success of that device helped Huawei’s smartphone sales in China grow 37% year on year, according to a report from Counterpoint Research.
  • Sales of Honor, the largest smartphone maker by market share, rose just 3% year on year. Vivo, Oppo and Apple all saw double-digit declines, according to Counterpoint Research.

References:

https://www.huawei.com/en/news/2023/10/businessresults-threequarters

https://www.lightreading.com/5g/huawei-reports-no-real-growth-in-q3

https://www.lightreading.com/5g/huawei-lifts-handset-outlook-wins-1b-in-5g-orders

https://www.cnbc.com/2023/10/27/huawei-grows-faster-than-apple-in-china-in-q3-after-mate-60-launch.html

 

Counterpoint Research: Global Smartphone Market Reaches its Lowest Q3 Levels in a Decade

Global sales of smartphones fell 8% in the third quarter from a year earlier amid a “slower-than-expected recovery in consumer demand,” with both Apple and Samsung losing market share to competing brands during the period, according to Counterpoint Research.  Highlights:

  • Global smartphone sell-through declined 8% YoY but grew 2% QoQ in Q3 2023.
  • Samsung led the market but declined YoY to reach its lowest quarterly level in the last decade.
  • A shorter period of iPhone 15 availability in Q3 led to a shift in demand to the next quarter.
  • The top five brands’ cumulative share declined in Q3 as challengers’ share grew.
  • HONOR, Huawei and Transsion Group were among the only top brands to record YoY growth

The July-September sales figure represented the lowest third-quarter level in a decade, the technology market research firm said, noting that year-over-year global smartphone sales have now fallen for nine consecutive quarters.

However, Counterpoint expects that trend of declines to come to a “halt” in the fourth quarter, as sales benefit from the full impact of the recently launched iPhone 15, the festival season in India, the 11.11 Singles’ Day holiday in China, Christmas, and end-of-year promotions later in the quarter. Counterpoint noted that third-quarter sales were up from the second quarter and that a good performance in September despite the limited availability of the new iPhones provides reason for optimism.

Global market leader Samsung saw its share of the global smartphone market drop to 20% in the third quarter from 21% a year earlier, as sales fell 13%. Apple’s share of the global smartphone market also fell 1 percentage point, to 16%, as its sales declined 9%.

The top five global brands — which also include Chinese smartphone makers Xiaomi, OPPO, and Vivo — made up a combined 64% of the global smartphone market in the third quarter of 2023, down from about 68% in 2022 and 2021, according to Counterpoint’s data. The Chinese companies recorded even steeper smartphone sales declines than Samsung and Apple as they “worked towards strengthening their positions in key markets like China and India while continuing to slow down expansionary efforts in overseas markets,” the report noted.

HONORHuawei and Transsion Group gained share and were among the only brands to record YoY growth in Q3. Huawei grew driven by the launch of the Mate 60 series in China, while HONOR’s growth was led by strong overseas performance. Transsion brands continued to expand while also benefiting from the recovery in the Middle East and Africa (MEA) market.

MEA was the only region to record YoY growth in Q3, owing to improvements in macroeconomic indicators. Most developed markets, like North America, Western Europe and South Korea, recorded steep declines. However, we expect most developed markets to grow in Q4 largely due to the delayed effect of the iPhone launch.

Following a strong September, we expect the momentum to continue till the year-end, beginning with the full impact of the iPhone 15 series along with the arrival of the festive season in India, followed by the 11.11 sales event in China and ending with the Christmas and end-of-year promotions across regions. In Q4 2023, we expect the market to halt its series of YoY declines.

However, the market is expected to decline for the full year of 2023, reaching its lowest level in the decade largely due to a shift in device replacement patterns, particularly in developed markets. Notably, the recovery of emerging markets before the global market and the growth of brands outside of the top five indicate the shifting dynamics and opportunities in the global smartphone market.

About Counterpoint Research:

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media, and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects, and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

References:

Global Smartphone Market Reaches its Lowest Q3 Levels in a Decade; Apple’s Share at 16%

Omdia: Global smartphone shipments decline in 2Q23 for 8th consecutive quarter

GfK: Global telecom market (x-North America) posts 9.7% revenue drop; smartphone revenues -10.2% in 2022

IDC: Global smartphone market will remain challenged through 1st half of 2023

 

Omdia: Global smartphone shipments decline in 2Q23 for 8th consecutive quarter

According to Omdia, smartphone shipments totaled 265,9 million units in the second quarter of 2023. This represents a decline of 9.5% compared to the previous year and a decrease of 1.2% compared to the previous quarter.  This is the eighth consecutive quarter of year-on-year decline in overall smartphone shipments.

The three largest OEMs, Apple, Samsung and Xiaomi, all saw their shipments fall more than 10% from 2Q22 to 2Q23.

Samsung had the most shipments in 2Q23, reporting 53.3 million shipments. This is a 11.5% dip from 1Q23, following the release of the S23-series, but more worryingly is a 14.3% fall year-on-year. This result follows the weak demand for mid/low-end smartphones due to the ongoing economic recession, and sales of Samsung’s Galaxy A series significantly declining. Despite this, Samsung smartphones maintained its market share of 20%, and its position as the largest player in the smartphone industry.

Apple had a big quarter-on-quarter fall following a successful 1Q23 for its iPhone 14 series. It recorded 43.2 million shipments, a 24.6% fall from 1Q23 and a 11.7% fall year-on-year from 2Q22. As such, Apple’s market share has fallen back down to its usual level for the second quarter of each year, at 16%. While it previously seemed that Apple was more resilient to the negative down-winds of the economy, it has now begun to feel the squeeze.

“Apple has strong sales of premium models such as the iPhone 14 Pro and Pro Max, while the standard and Plus models sluggish sales compared to their predecessors. Normally, from the second quarter, the standard model should drive up the overall quantity, but this year it is different. Demand for Pro and Pro Max is increasing, especially among high-income consumers.” said Jusy Hong, Senior Research Manager at Omdia.

Xiaomi’s shipments continue to fall globally, falling to 33.2 million, a 15.7% fall year-on-year – from 39.4 million in 2Q22. It still occupies the third spot globally but is facing stiff competition from other Chinese OEMs Oppo and vivo. The weak Indian market remains a problem for Xiaomi, as their biggest market. However, it is further establishing itself in Western Europe, something many other Chinese brands have failed to do.

Oppo Group (including OnePlus) recorded 25.0 million shipments in 1Q23, a fall of 10.5% from the previous year. This fall isn’t as far as Xiaomi’s and as a result, Xiaomi’s lead over Oppo Group has diminished from 11.5 million in 2Q22 to just 8.3 million in 2Q23.

Transsion Holding has recorded a combined total of 24.5 million – a 38.4% increase year-on-year from the 17.7 million shipped in 2Q22. This pushes Transsion Holdings ahead of vivo to be the fifth largest smartphone OEM in 2Q23, coming after a period of long stagnation as it was digesting the inventories from 1Q23. Its efforts to expand into more markets is also proving successful.

Zaker Li, Omdia Principal Analyst says, ‘The main reason for the increase in shipments was that Transsion completed inventory adjustment in the first quarter this year and increased supply of new products from 2Q. Transsion is targeting the low-end smartphone market in more countries in Asia and Oceania.’

Hong concludes: “The smartphone industry remains in a slump, and we are expecting the market to contract year-on-year until 3Q23. But there is hope for a recovery in the fourth quarter this year. Apple and Samsung have both faced challenges and have revised their targets down as a result. But these problems will ease come the end of the year and into 2024. Inflation and the resulting squeeze on wage packets and the economy is already easing globally, and high inventory levels is already being tackled by many OEMs. The growing popularity of recycled smartphones is hindering the growth of new smartphone shipments. In particular, it is the main reason for the recent decline in demand in the mid-range smartphone market. Overall shipment forecasts for this year have been revised down over the past several months. However, we expect the smartphone shipments will also recover as the economy recovers.”

Smartphone quarterly result 2Q23

References:

https://omdia.tech.informa.com/pr/2023/08-aug/omdia-global-smartphone-shipments-continue-to-decline-year-on-year-for-eighth-consecutive-quarter

IDC: Global smartphone market will remain challenged through 1st half of 2023

GfK: Global telecom market (x-North America) posts 9.7% revenue drop; smartphone revenues -10.2% in 2022

Omdia and IDC: Samsung regains lead in global smartphone market

Trendforce: Global Smartphone Market to Reach 1.36 Billion Units in 2021 as Samsung regains #1 position

Counterpoint & Canalys: Global Smartphone Market Shows Signs of Recovery in Q3-2020

 

Huawei forecast to increase mobile phone shipments despite Android ban

According to the China media outlet STN, Huawei has raised its mobile phone shipment target for 2023 to 40 million units.  Huawei had set this target at 30 million units at the beginning of the year. In this regard, a relevant person from Huawei told the “Securities Daily” reporter that this adjustment is a normal (shipment) target adjustment.  That projected increase in mobile phone sales comes despite the ban preventing Huawei from using the Android OS.  Instead, Huawei uses its home made HarmonyOS which is based upon micro kernel based distributed system whereas Android OS is based upon Linux kernel at its core.

People close to Huawei said that the current sales of Huawei smartphones are improving, and the recent sales of P60, MateX3 and other mobile phones are relatively satisfactory. “We have indeed raised our mobile phone shipment target for this year. But the specific number is inconvenient to disclose.”

A person in the supply chain said, “Huawei set its mobile phone shipment target for this year at 30 million units at the beginning of the year. As sales rebounded and market demand increased, Huawei recently adjusted its mobile phone shipment target to 40 million units this year, an increase of over 30%. ”

“If the news is true, it means that Huawei has confidence in the company’s mobile phone shipments in 2023.  According to market research firm Omdia, Huawei’s mobile phone shipments in 2022 will be 28 million units,

“The shipment target for this year has been raised by nearly 43%.” A market source who did not want to be named told the reporter. That’s in sharp contrast to  the global mobile phone market, which Omdia said declined 12.7% in Q1-2023. Samsung sales contracting 18% and Xiaomi’s falling by 22%.  Despite the large year-on-year fall Samsung has experienced, it still had the most shipments in 1Q23, reporting 60 million shipments. It has seen a small 3.2% rise in shipments compared to the previous quarter.

Omdia noted Huawei’s quarterly sales had dipped sequentially in the last two quarters but, thanks to a year of growth from Q4 2021 to Q3 2022, the company “is still in a better position now versus a year ago.”

Huawei ranks tenth on Omdia’s list of global handset vendors with just 2% of the market. Honor, the mid and low-end smartphone brand it sold off two years ago, has a 4% share.

Industry insiders believe that if Huawei raises its shipment target, it is also related to its product market performance. Counterpoint data shows that in the first quarter of 2023, Huawei’s domestic smartphone shipments bucked the trend and increased by 41%, with a domestic market share of 9.2%, a year-on-year increase of 3 percentage points.

“Huawei’s folding screen mobile phone shipments have continued to increase this year and the supply is in short supply. Therefore, Huawei needs to increase its stocking.” Yang Siliang, a partner of Zhou Yan Consulting, said in an interview with a reporter from the “Securities Daily.”

Source: Karlis Dambrans on Flickr, CC 2.0

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Meanwhile in its core carrier equipment business, Huawei continues to dominate the Chinese market. It has just won 7.9 billion Chinese yuan (US$1.1 billion) in orders from China Mobile in China’s largest telecom tender so far this year.  Huawei was the dominant supplier in both parts of the tender, which was divided into 2.6GHz and 4.9GHz on one side and 700MHz gear on the other. Huawei was awarded contracts to supply just over half of the 64,000-basestation deployment, worth CNY3.76 billion ($530 million).

For China Mobile’s joint rollout with China Broadnet in the 700MHz band, Huawei won contracts for half of the 23,140 basestations with a total value of around CNY1.74 billion ($243 million), local website C114 calculated.

ZTE won the second largest volume of orders, worth CNY2.1 billion ($294 million), followed by Ericsson with CNY630 million ($88 million), Datang Mobile with CNY550 million ($77 million) and Nokia Bell with CNY400 million ($56 million).

References:

https://www.stcn.com/article/detail/891406.html

https://www.lightreading.com/5g-and-beyond/huawei-lifts-handset-outlook-wins-$1b-in-5g-orders/d/d-id/785302?

https://omdia.tech.informa.com/pr/2023/05-may/omdia-global-smartphone-shipments-remain-in-a-slump-falling-127-from-the-previous-year-with-samsung-and-xiaomi-seeing-big-declines

IDC: Global smartphone market will remain challenged through 1st half of 2023

An updated forecast for the worldwide smartphone market from International Data Corporation (IDC) is showing a more prolonged recovery than previously expected. According to the latest Worldwide Quarterly Mobile Phone Tracker forecast, shipments of smartphones will decline 9.1% in 2022, a reduction of 2.6 percentage points from the previous forecast. As a result, IDC expects smartphone shipment volumes to total 1.24 billion units in 2022. While a recovery of 2.8% is still anticipated in 2023, IDC did reduce its 2023 smartphone forecast by roughly 70 million units, given the ongoing macroeconomic environment and its overall impact on demand.

“We believe the global smartphone market will remain challenged through the first half of 2023, with hopes that recovery will improve around the middle of next year and growth across most regions in the second half,” said Ryan Reith, group vice president with IDC’s Worldwide Mobility and Consumer Device Trackers. “Rising costs are an obvious concern for the smartphone market and adjacent consumer technology categories, but we believe most of this reduced demand will be pushed forward and will support global growth in late 2023 and beyond. A device refresh cycle continues to build in many challenged emerging markets while developed markets have offset rising costs with increased promotional activity, more attractive trade-in offers, and extended financing plans. This has supported growth in the high-end of the market despite the economic headwinds.”

5G continues to build out globally and will account for just over half of smartphones shipped worldwide in 2022, rising to 80% by 2026. In addition, market momentum continues to build around foldable phones. While this category is only about 1-2% of the global market in 2022, it still accounts for roughly 15-16 million smartphones. This number will only grow as costs decrease and more OEMs get behind the form factor transition.

“Despite the market slowdown, average selling prices (ASPs) continue to grow as consumers opt for premium devices that can last three to four years as refresh rates elongate in both developed and emerging markets,” said Anthony Scarsella, research director with IDC’s Worldwide Mobility and Consumer Device Trackers. “Smartphone ASPs are expected to grow for the third consecutive year as average selling prices will reach $413, up 6.4% from $388 in 2021. The last time the market witnessed ASPs surpass $400 was in 2011 ($425), when the market displayed over 60% shipment growth. Moreover, iOS unit share will reach 18.7% (the highest of any forecast year), which is a driving force behind the high ASP growth we currently see in 2022.”

Worldwide Smartphone Forecast by OS, 2023 and 2026 Shipments, Year-Over-Year Growth, and 5-Year CAGR (shipments in millions)
OS 2023 Shipments 2023/2022 Growth 2026 Shipments 2026/2025 Growth 5-Year CAGR
Android 1036.9 3.1% 1145.7 2.5% 0.4%
iOS 233.5 1.3% 247.5 1.9% 1.0%
Total 1270.3 2.8% 1393.2 2.3% 0.5%
Source: IDC Quarterly Mobile Phone Tracker, December 2nd, 2022

 

IDC previously lowered its 2022 smartphone outlook in June, from an initial expectation of 1.6% growth in the space.

Broadly, the global sale of smartphones this year has been affected by a variety of macroeconomic trends including rising costs. For wireless network operators, that means fewer sales of smartphones and fewer opportunities to gain new customers who might switch providers amid the purchase of a new phone.

The trend could also affect 5G specifically. That’s because consumers globally may be holding onto 4G phones longer in order to avoid the purchase of a costly 5G phone.

IDC’s latest forecast follows similar warnings from other players in the space. For example, Qualcomm last month provided a revenue forecast fully $2 billion below market estimates. Qualcomm supplies core silicon to the likes of Apple, Samsung and others.

At the time, Qualcomm also reduced its projections for global 5G handset sales in 2022 to around 650 million, down from earlier forecasts of up to 750 million units

About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC’s Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly Excel deliverables and on-line query tools.

For more information about IDC’s Worldwide Quarterly Mobile Phone Tracker, please contact Kathy Nagamine at 650-350-6423 or [email protected].

Click here to learn about IDC’s full suite of data products and how you can leverage them to grow your business.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC’s analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world’s leading tech media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights.

References:

https://www.idc.com/getdoc.jsp?containerId=prUS49927022

https://www.lightreading.com/5g/smartphone-industry-to-begin-recovery-late-next-year—idc/d/d-id/782112?

IDC: Global Smartphone Shipments +7.4% in 2021, led by Emerging Markets

Omdia and IDC: Samsung regains lead in global smartphone market

Trendforce: Global Smartphone Market to Reach 1.36 Billion Units in 2021 as Samsung regains #1 position

Counterpoint & Canalys: Global Smartphone Market Shows Signs of Recovery in Q3-2020

 

Musk’s SpaceX and T-Mobile plan to connect mobile phones to LEO satellites in 2023

During a live media event Thursday afternoon, T-Mobile’s Mike Sievert and SpaceX’s Elon Musk announced a new partnership that’s intended to connect T-Mobile sold phones to a new constellation of SpaceX’s Starlink satellites. The result, according to the companies, will be the elimination of all cellular dead zones around the U.S.

“It’s a lot like putting a cellular tower in the sky,” Sievert said, adding that the “vast majority” of T-Mobile’s existing phones would be supported by the service. Meaning, customers will not need to purchase new phones in order to connect them to Starlink’s second-generation satellites.

Sievert said that T-Mobile expects to offer the service for no additional charge on its more expensive plans. For customers on its cheaper plans, he said they may need to pay an additional monthly charge in order to be able to access satellite coverage.

Starlink’s satellites will use T-Mobile’s mid-band spectrum to create a new network. Most phones used by the company’s customers will be compatible with the new service, which will start with texting services in a beta phase beginning by the end of next year.  The companies did not say when it might launch commercially.

T-Mobile CEO Mike Sievert at a joint news conference at Space X facility in Brownsville, TX

REUTERS/Adrees Latif

SpaceX has launched nearly 3,000 low-Earth-orbiting (LEO) Starlink satellites since 2019, handily outpacing rivals OneWeb and Amazon.com Inc’s Project Kuiper.  Starlink recently suffered a major setback when the FCC rejected the company’s application for almost $900 million in government subsidies. The agency ruled that Starlink’s service likely wouldn’t be able to meet the agency’s speed and service requirements.

SpaceX’s next-generation Starlink satellites, the first of which are planned to launch on SpaceX’s next-generation Starship rocket whenever it is fully developed, will have larger antennae that will allow connectivity directly to mobile phones on the T-mobile network, Musk said.

Meanwhile, U.S telecom firms are in a race to build up the mid-band portion of their 5G networks to catch up with T-Mobile, which bagged a chunky 2.5 GHz of mid-band spectrum thanks to a buyout of rival Sprint.

Mid-band or C-Band has proven to be perfect for 5G, as it provides a good balance of capacity and coverage.  T-Mobile said it aims to pursue voice and data coverage after the texting services beta phase.

Others in the Mix:

Satellite communications firm AST SpaceMobile Inc is also building a global cellular broadband network in space that will operate with mobile devices without the need for additional hardware.  AST SpaceMobile is relying on SpaceX’s rockets to get its satellites into orbit, having pivoted away from a plan to use Russian rockets after Russia’s invasion of Ukraine.

“Elon [Musk] and Mike [Sievert, of T-Mobile] helped the world focus attention on the huge market opportunity for SpaceMobile, the only planned space-based cellular broadband network,” AST SpaceMobile CEO Abel Avellan wrote on LinkedIn yesterday. “BlueWalker 3 … is scheduled for launch within weeks!”

Meanwhile, Verizon and AT&T each have their own satellite plans: Verizon plans to use Amazon’s planned Project Kuiper satellites to connect its rural cell towers to the Internet, and AT&T is planning a similar setup with OneWeb’s own growing constellation of low-Earth orbit (LEO) satellites.

In 2020, AT&T agreed to let startup AST SpaceMobile use its Band 5 spectrum to test transmissions from its BlueWalker 1 satellite to devices on the ground. AST SpaceMobile is now hoping to launch its new BlueWalker 3 prototype later next month. However, as reported by SpaceNews, supply chain issues delayed the launch of AST SpaceMobile’s first operational satellite by about six months, to late 2023.

AST SpaceMobile’s main rival, Lynk, already has one operational satellite in orbit for phone connections. As noted by Ars Technica, the company is hoping to receive FCC approval to offer satellite-to-phone services across 35 countries by the end of this year.

“Elon said it’s hard, and it’s only been done in the lab, but Lynk has done it in space already,” Lynk’s Charles Miller told the publication yesterday. “We’re the only company in the world that has done that.”

Lynk hasn’t yet announced an agreement with a major U.S. network operator, though it has agreements with a number of international operators.  Lynk tested its services in the U.S. with Smith Bagley, a tiny wireless network operator offering services under the Cellular One brand in East Arizona.

“There are significant regulatory hurdles to clear, as the FCC is reviewing SpaceX’s request to launch a constellation of 30,000 Gen2 satellites, while other LEO proposals including Amazon’s Project Kuiper (with whom Verizon is collaborating) and AST SpaceMobile (financial backing from Vodafone and a commercial agreement with AT&T) are also working DC as well as international agencies to put some rules in place for this latest chapter of the Space Race,” Raymond James analysts wrote in a note to investors.

References:

https://www.reuters.com/business/media-telecom/elon-musks-spacex-t-mobile-us-plan-boost-cellular-coverage-space-2022-08-26/

https://www.lightreading.com/satellite/t-mobile-and-spacex-want-to-connect-regular-phones-to-satellites/d/d-id/779964?

https://www.lightreading.com/satellite/did-elon-musk-just-upstage-tim-cooks-big-iphone-14-surprise/a/d-id/779976?

UPDATE:  Apple iPhone 14 text messages via Globalstar LEO satellites starting Nov 2022:

Emergency SOS: Apple iPhones to be able to send/receive texts via Globalstar LEO satellites in November 2022

Canalys: Global Smartphone Shipments Fell 6% in 3Q-2021; Samsung Still #1

According to a new report by market tracker Canalys, global smartphone shipments fell 6 per cent in the third quarter (July-September period) this year, as vendors struggled to meet demand for devices amid component shortages.  That decline comes after shipments increased by 12% in the second quarter of 2021.

  • Samsung was the leading smartphone player with 23 per cent share.
  • Apple regained second place in the global smartphone market with 15 per cent share in the third quarter (Q3) this year, thanks to strong early demand for iPhone 13.
  • Xiaomi took 14 per cent share for the third place, while Vivo and Oppo completed the top five with 10 per cent share each.

“The chipset famine has truly arrived,” said Canalys Principal Analyst, Ben Stanton. “The smartphone industry is striving to maximize production of devices as best it can. On the supply side, chipset manufacturers are increasing prices to disincentivize over-ordering, in an attempt to close the gap between demand and supply. But despite this, shortages will not ease until well into 2022. As a result of this, as well as high costs of global freight, smartphone brands have reluctantly pushed up device retail pricing.”

“At the local level, smartphone vendors are also having to implement last-minute changes in device specification and order quantities. It is critical for them to do this and maximize volume capacity, but unfortunately it does lead to confusion and inefficiency when communicating with retail and distributor channels,” continued Stanton. “Many channels are nervous heading into important sales holidays, such as Singles’ Day in China, and Black Friday in the west. Channel inventories of smartphones are already running low, and as more customers start to anticipate these sales cycles, the impending wave of demand will be impossible to fulfill. Customers should expect smartphone discounting this year to be less aggressive. But to avoid customer disappointment, smartphone brands which are constrained on margin should look to bundle other devices, such as wearables and IoT, to create good incentives for customers.”

References:

https://www.canalys.com/newsroom/canalys-global-smartphone-market-Q3-2021

Canalys 2Q-2021 smartphone rankings show big gains for Xiaomi and OPPO

Canalys 2Q-2021 smartphone rankings show big gains for Xiaomi and OPPO

Telecom, IT and cloud market research firm Canalys, said that global smartphone shipments increased by 12% in the second quarter of 2021.   Samsung still maintains its position as the world’s number one with a market share of 19%. Xiaomi’s mobile phone sales surpassed Apple’s and rose to the second place in the world for the first time, with a share of 17%. Apple ranked third with 14%. OPPO and Vivo ranked fourth and fifth in the world, with a market share of 10%.

Xiaomi’s growth rate is as high as 83%, making it the top five mobile phone brand with the fastest growth rate in market share.  Lei Jun, the founder and CEO of Xiaomi, sent three consecutive Weibo messages to express his congratulations to Xiaomi, and at the same time released the “Open Letter to Xiaomi Students.” Lei Jun said that Xiaomi’s becoming the second ranked global smartphone vendor is a major milestone in the history of Xiaomi’s development.

In the third quarter of 2014, Xiaomi entered the top three in the world for the first time, and then encountered huge difficulties, and soon fell out of the top five in the world. In 2020, the launch of Xiaomi Mi 10 series will fully launch the development of Xiaomi mobile phones. In the high-end journey, in the third quarter of the same year, Xiaomi returned to the third place in the world. Only two quarters later, Xiaomi was promoted to the second place in the world.

Lei Jun also said that “the second in the world” is a major victory for Xiaomi’s strategy. In August last year, Xiaomi established its core strategy for the next ten years-mobile phone X AIoT, once again clarifying the core position of the smartphone business, progressing to promote intelligent interconnection, and the AIoT business will build a smart life around the core business of mobile phones. At the same time, it has established the “three iron laws” that will never change: technology-oriented, cost-effectiveness-oriented, and making the coolest products.

About Xiaomi:

Xiaomi is an electronics company based in Beijing, China.  It was founded by Lei Jun in April 2010, and in 2014, Xiaomi was the largest smartphone company in China. Today, Xiaomi is one of the top five smartphone vendors in the world.

The “MI” in their logo stands for “Mobile Internet.” It also has other meanings, including “Mission Impossible”, because Xiaomi faced many challenges that had seemed impossible to defy in our early days.

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Meanwhile, Canalys said that OPPO ranked first among Android smartphone manufacturers.  In addition to launching 5G phones in the full price range to meet the different needs of consumers, OPPO has been actively taking the lead in applying new technologies to its latest models.

Canalys wrote that in Middle East and Africa, OPPO has climbed to fourth place in market share with a 106% year-on-year growth. The United Arab Emirates and Saudi Arabia have been at the forefront of this rise, witnessing a 196% and a 218% year-on-year growth respectively which was attributed to OPPO’s innovative product offering and strong customer service. In addition, OPPO saw a year-on-year growth of 79% in Egypt.

Ethan Xue, President of OPPO MEA said, “We are proud to see our innovative products and customer-centric approach being well received and reflected in these promising figures. Our growth in the MENA region is phenomenal and illustrates the strong customer base we have that support us and understand our brand mission, technology for mankindkindness for the world. At OPPO, we continue to push the boundaries and our growth only serves to motivate us even more to offer our customers the best possible products at competitive prices.”

The main proponent of the brands growth is strong product launches that closely align with the evolving demands of smartphone users. Earlier this month, OPPO launched the anticipated Reno6 series, comprising of three variations, the Reno6 Pro 5GReno6 5G, and the Reno6 Z 5G that have all been masterfully designed for trendsetting individuals, game enthusiasts and the young at heart. From stunning design details to powerful features, the Reno6 series is already proving to be popular in the region, with a 300% pre-order increase compared to its predecessor, solidifying the demand for the technology brand in MENA.

About OPPO:

OPPO is headquartered in Dongguan, China an has been a leading global technology brand since 2004, dedicated to providing products that seamlessly combines art and innovative technology.

OPPO says they’re on a mission to building a multiple-access smart device ecosystem for the era of intelligent connectivity. The smartphone devices have simply been a gateway for OPPO to deliver a diverse portfolio of smart and frontier technologies in hardware, software and system. In 2019, OPPO launched a $7 Billion US Dollar three-year investment plan in R&D to develop core technologies furthering design through technology.

For the last 10 years, OPPO has focused on manufacturing smartphones with camera capabilities that are second to none. OPPO launched the first mobile phone, the Smile Phone, in 2008, which marked the launch of the brand’s epic journey in exploring and pioneering extraordinary technology. Over the years, OPPO has built a tradition of being number one, which became a reality through inventing the world’s first rotating camera smartphone way back in 2013, launching the world’s then thinnest smartphone in 2014, being the first to introduce 5X Zoom ‘Periscope’ camera technology and developing the first 5G commercial smartphone in Europe.

OPPO is currently ranked as the number four smartphone brand globally. OPPO brings the aesthetics of technology of global consumers through the ColorOS system Experience, and Internet service like OPPO Cloud and OPPO+.

OPPO’s business covers 40 countries with over six research institutes and five R&D centers across the world, from San Francisco to Shenzhen. OPPO also opened an International Design Centre headquartered in London, driving cutting edge technology that will shape the future not only for smartphones but for intelligent connectivity.

References:

https://min.news/en/tech/5f2410bda155bbec25c819b98c454623.html

https://www.prnewswire.com/news-releases/oppo-ranked-first-in-global-5g-smartphone-shipments-among-android-manufacturers-301391332.html

NEW for 3Q2021 Rankings:

https://techblog.comsoc.org/2021/10/16/canalys-global-smartphone-shipments-fell-6-in-3q-2021-samsung-still-1/

 

IDC: Global Smartphone Shipments +7.4% in 2021, led by Emerging Markets

IDC forecasts that global smartphone shipments are set to increase by 7.4% this year, marking a return to growth after the Covid-19 pandemic hit the industry in 2020, according to new analyst figures. IDC estimates worldwide smartphone shipments at 1.37 billion units in 2021, which represents “minimal growth” compared with pre-pandemic 2019. Its data for 2019 shows shipments of 1.372 billion, then a 5.9% decline to 1.29 billion the following year. Making comparisons with 2019 (pre-COVID) gives a more accurate picture of the state of the market.

The 7.4% growth can be attributed to a healthy 13.8% growth from iOS devices combined with 6.2% growth from Android. Although COVID-19 drastically impacted 2020 shipments, 2021 shipments have managed to display minimal growth compared to 2019 (pre-pandemic) volumes, giving us a more accurate view of the state of the market. The world’s largest markets – China, the United States, and Western Europe – will still be down from 2019, but growing markets such as India, Japan, the Middle East, and Africa are fueling the recovery.

“The smartphone market was better prepared from a supply chain perspective heading into 2020 given almost all regions were expecting to grow and vendors were preparing accordingly,” said Ryan Reith, group vice president with IDC’s Mobility and Consumer Device Trackers. “2020 was a bust due to the pandemic but all of the top brands continued forward with their production plans with the main difference that the timeline was pushed out. Therefore, we are at a point where inventory levels are much healthier than PCs and some other adjacent markets and we are seeing the resilience of consumer demand in recent quarterly results.”

5G shipments continue to be a primary driver of 2021 growth as both vendors and channels focus on 5G devices that carry a significantly higher average selling price (ASP) than older 4G devices. The ASP of a 5G smartphone will reach $634 in 2021, which is flat from $632 in 2020. However, 4G devices continue to witness a massive price decline as the ASP drops to $206, representing a nearly 30% decline from last year ($277). As a result, the total 5G shipment volume will grow to 570 million units, up 123.4% from last year.

China will continue to lead the smartphone market with 47.1% of the 5G global market share, followed by the USA at 16%, India at 6.1%, and Japan at 4.1%. By the end of 2022, 5G units are expected to make up more than half of all smartphone shipments with a 54.1% share.

“Despite the ongoing issues surrounding the pandemic and the Delta variant, consumers are continuing to upgrade to more premium smartphones this year,” said Anthony Scarsella, research director, Mobile Phones at IDC. “Premium smartphones (priced at $1000+) continued to grow in the second quarter as the segment displayed 116% growth from last year. Moreover, ASPs across the entire market climbed 9% as buyer preferences trend towards more costly 5G models than entry-level devices.”

Closing Comment:  We don’t share IDC’s enthusiastic forecast for 5G smartphones, because they do not support any new features, applications or use cases without a 5G SA core network.  As 95% of deployed 5G networks are NSA (requiring a 4G anchor/core network), 5G smartphones that use 5G NSA networks are only a little faster [1.] than 4G-LTE phones with no noticeable improvement in latency. Also, there’s no roaming, so users must fall back to 4G-LTE when outside of their 5G carrier serving area.  Mobile subscribers will soon realize that and stop buying 5G smartphones.

Note 1.  PC magazine has tested smartphones on 5G networks from AT&T, T-Mobile, and Verizon. Their report Fastest Mobile Networks 2021 found that T-Mobile’s new mid-band 5G network is the only U.S. nationwide 5G that’s markedly faster than 4G

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About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC’s Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly Excel deliverables and on-line query tools.

For more information about IDC’s Worldwide Quarterly Mobile Phone Tracker, please contact Kathy Nagamine at 650-350-6423 or [email protected].

References:

https://www.idc.com/getdoc.jsp?containerId=prUS48194821

https://www.idc.com/tracker/showproductinfo.jsp?containerId=IDC_P8397

https://www.pcmag.com/news/fastest-mobile-networks-2021

https://techblog.comsoc.org/2021/08/22/juniper-research-5g-smartphone-trends/