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China Smartphone & 5G Shipments
In September China’s mobile phone shipments declined to 23.3m units, down 13.4% m/m and down 35.6% y/y. On a YTD basis China’s mobile phone shipments have totaled 225.6m units, down 21.5% y/y. While September was a busy month in terms of the number of new models released (58 vs. 45 in the previous month) and the number of Chinese new models released (51 vs. 42 last month), smartphone shipments were only 22.0m units, down 14.1% m/m and down 36.6% y/y. There were 26 new 5G smartphones released in China in September, up from 22 last month, and the highest monthly number this year, but 5G unit shipments decreased 13.6% m/m (still up 2,717% y/y) to 14m units after a strong August, although the share of 5G shipments remained at 60% for the 2ndmonth in a row.
The conclusion is that China’s mobile phone and smartphone shipments remain subdued, and while we expect a seasonal bump up in October and November, the full year is looking to remain down ~20% y/y. On the positive side 5G phone shipments, while they seem to have leveled off recently, tracking overall smartphone shipment patterns, seem to be holding at ~60% share of total shipments. This should help the overall value of mobile phone shipments this year to be slightly higher on a relative basis, but 5G shipments will certainly not bail out a weak mobile phone shipment year in China, particularly as 5G phone premiums are eroding quickly and Apple’s iPhone 12, despite its full 5G line-up, is later than usual.
While 2021 is getting close, the fate of Huawei will be a major factor in how China’s smartphone market looks next year, and much of that will depend on the upcoming US election. If President Trump remains in power, we expect a bit less anti-China rhetoric but little change in policy. If former VP Biden wins, there is some chance that the most stringent restrictions might be eased, but it would take quite a bit of rationalization to make substantive and immediate changes to trade policy with China, without raising the ire of those who see China as the cause for a decline in US global economic stature. If little or no change is made to China and more specifically Huawei’s trade policy, Huawei’s ~200m smartphone unit volume (238m in 2019) will be significantly reduced.
Figure 1: China Smartphone Shipments 2019 – 2020
In September China’s mobile phone shipments declined to 23.3m units, down 13.4% m/m and down 35.6% y/y. On a YTD basis China’s mobile phone shipments have totaled 225.6m units, down 21.5% y/y. While September was a busy month in terms of the number of new models released (58 vs. 45 in the previous month) and the number of Chinese new models released (51 vs. 42 last month), smartphone shipments were only 22.0m units, down 14.1% m/m and down 36.6% y/y. There were 26 new 5G smartphones released in China in September, up from 22 last month, and the highest monthly number this year, but 5G unit shipments decreased 13.6% m/m (still up 2,717% y/y) to 14m units after a strong August, although the share of 5G shipments remained at 60% for the 2ndmonth in a row.
The conclusion is that China’s mobile phone and smartphone shipments remain subdued, and while we expect a seasonal bump up in October and November, the full year is looking to remain down ~20% y/y. On the positive side 5G phone shipments, while they seem to have leveled off recently, tracking overall smartphone shipment patterns, seem to be holding at ~60% share of total shipments. This should help the overall value of mobile phone shipments this year to be slightly higher on a relative basis, but 5G shipments will certainly not bail out a weak mobile phone shipment year in China, particularly as 5G phone premiums are eroding quickly and Apple’s iPhone 12, despite its full 5G line-up, is later than usual.
While 2021 is getting close, the fate of Huawei will be a major factor in how China’s smartphone market looks next year, and much of that will depend on the upcoming US election. If President Trump remains in power, we expect a bit less anti-China rhetoric but little change in policy. If former VP Biden wins, there is some chance that the most stringent restrictions might be eased, but it would take quite a bit of rationalization to make substantive and immediate changes to trade policy with China, without raising the ire of those who see China as the cause for a decline in US global economic stature. If little or no change is made to China and more specifically Huawei’s trade policy, Huawei’s ~200m smartphone unit volume (238m in 2019) will be significantly reduced.
Figure 1: China Smartphone Shipments 2019 – 2020
Figure 2 - China 5G Smartphone Shipments & Share
