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China’s Q221 Smartphone Down 26.3% Y/Y
Handset shipments in China improved in June at 25.64m units, down 10.3% Y/Y. The 2nd quarter saw shipments of 76.14m units, down 22.3% q/q and down 26.9% y/y, against the COVID-19 snapback seen in last year’s 2Q. The 1st half shipments were 174.14m units, up 13.8%, with the 1H Y/Y improvement coming primarily from the very weak Q121, when COVID-19 caused significant lockdowns.
Huawei continued struggling as they are unable to get parts, buy on the positive side, 5G smartphone shipments continue to increase, +18.2% sequentially in June to 19.79m units, and while 5G shipments in 2Q were down 17% Q/Q, they were up 17% Y/Y, again with the weakness likely coming from Huawei. 5G shipments in 1H were 127.8m units, up 101% y/y. 5G smartphone shipments represented 77.2% of the total in June, slightly below the peak of 77.9% seen in April, but remains on an increasing trend line. As 5G antenna and modem costs are reduced, we expect the 5G share trend to continue to increase but we expect the y/y ROC to level off until 5G connectivity becomes more meaningful in low-end phones, likely in concert with the next round of integrated modems that we expect relatively early next year. We note that 2G and 3G phone shipments in China have now fallen to ~1% and are already meaningless relative to 4G and 5G.
Handset shipments in China improved in June at 25.64m units, down 10.3% Y/Y. The 2nd quarter saw shipments of 76.14m units, down 22.3% q/q and down 26.9% y/y, against the COVID-19 snapback seen in last year’s 2Q. The 1st half shipments were 174.14m units, up 13.8%, with the 1H Y/Y improvement coming primarily from the very weak Q121, when COVID-19 caused significant lockdowns.
Huawei continued struggling as they are unable to get parts, buy on the positive side, 5G smartphone shipments continue to increase, +18.2% sequentially in June to 19.79m units, and while 5G shipments in 2Q were down 17% Q/Q, they were up 17% Y/Y, again with the weakness likely coming from Huawei. 5G shipments in 1H were 127.8m units, up 101% y/y. 5G smartphone shipments represented 77.2% of the total in June, slightly below the peak of 77.9% seen in April, but remains on an increasing trend line. As 5G antenna and modem costs are reduced, we expect the 5G share trend to continue to increase but we expect the y/y ROC to level off until 5G connectivity becomes more meaningful in low-end phones, likely in concert with the next round of integrated modems that we expect relatively early next year. We note that 2G and 3G phone shipments in China have now fallen to ~1% and are already meaningless relative to 4G and 5G.
Apple shipment growth will show up primarily in 2H. Overall component shortages could also cut into total 2021 smartphone shipments in China, but there has been little impact from component shortages in 1H and less of an overall impact on demand from increasing component prices for smartphones than with other CE devices.