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Q220 Smartphone Shipments in US Declined 25% Y/Y
July 26, 2020
Counterpoint Research reported smartphone sales volume in the U.S. declined 25% Y/Y in Q220. Apple's U.S. iPhone sales were down 23%. Apple and Samsung maintained their sales volume better than other manufacturers. A number of factors helped the iPhone SE drive Apple sales throughout the quarter, including the re-opening of retail channels in the U.S. and promotional offers from stores like as Walmart, Metro and Boost. The iPhone is also o be attracting Android switchers as 26% of iPhone SE users moved from an Android device. Buyers upgrading from an older device also represent a significant portion of iPhone SE buyers, since 30% of customers upgraded from an iPhone 6s or older. Counterpoint's checks indicate that iPhone SE sales aren't likely to cannibalize the fall "iPhone 12" lineup, due to the fact that "iPhone SE buyers are more interested in price, less concerned with 5G, and not concerned with the smaller display size. Smartphone sales for May through June actually grew week-over-week, and June 2020 sales were higher Y/Y, suggesting that the smartphone market is starting to recover from the coronavirus impact. Data from Consumer Intelligence Research Partners (CIRP) indicated that the iPhone SE made up nearly one-fifth of all iPhone purchases in the first quarter that it was available. From: Counterpoint
Figure 1: iPhone Mix; US Sales
July 26, 2020
Counterpoint Research reported smartphone sales volume in the U.S. declined 25% Y/Y in Q220. Apple's U.S. iPhone sales were down 23%. Apple and Samsung maintained their sales volume better than other manufacturers. A number of factors helped the iPhone SE drive Apple sales throughout the quarter, including the re-opening of retail channels in the U.S. and promotional offers from stores like as Walmart, Metro and Boost. The iPhone is also o be attracting Android switchers as 26% of iPhone SE users moved from an Android device. Buyers upgrading from an older device also represent a significant portion of iPhone SE buyers, since 30% of customers upgraded from an iPhone 6s or older. Counterpoint's checks indicate that iPhone SE sales aren't likely to cannibalize the fall "iPhone 12" lineup, due to the fact that "iPhone SE buyers are more interested in price, less concerned with 5G, and not concerned with the smaller display size. Smartphone sales for May through June actually grew week-over-week, and June 2020 sales were higher Y/Y, suggesting that the smartphone market is starting to recover from the coronavirus impact. Data from Consumer Intelligence Research Partners (CIRP) indicated that the iPhone SE made up nearly one-fifth of all iPhone purchases in the first quarter that it was available. From: Counterpoint
Figure 1: iPhone Mix; US Sales
Apple looks set to unveil dual-mode 5G iPhones later this year, setting the benchmark for high-end smartphones and outracing Android competitors in phone specs. But industry observers speculate that Apple may introduce single-band iPhones in 2021 due to practicality and cost concerns. In the iPhone supply chain, Luxshare promises to be a new assembler after taking over two of Wistron's assembly lines in China. In the displays sector, LCD panel maker AUO has stepped up efforts for LED applications by having its subsidiary Lextar form a holding company with fellow LED firm Epistar.
Apple may roll out iPhones with single 5G band support in 2021, say sources: Apple's 2020 series of iPhones will work on both sub-6GHz and mmWave 5G networks, but there is a good chance that the vendor may introduce new models supporting either of the bands but not both for specific markets in 2021, according to sources from Taiwan's IC supply chain.
Existing iPhone models (SE and 11) are doing well and Apple is also producing a few older models (XR and earlier). SE demand is stronger than expected (except in China, where apparently only 5G models are selling), the forecast is now 31m. Some of the iPhone 11 production reflects intentional inventory stockpiling to cover for delays in the ramp up of mass production of new 2020 models. New 2020 models are forecast to reach only 62m units by the end of 2020 due to production delays of 1 to 2 months. Since Apple normally makes between 75m and 80m units a year, assuming a normal pace of sales, production in 1Q 2021 should be stronger than in a typical 1Q. However, this year there has been a marked deterioration in the smartphone sales mix, with flagship models not selling well. (Applies to Huawei and Samsung). Mix deterioration may be a factor, but another reason is the strong sales of the SE and the higher BOM costs of the iPhone 11 due to 5G and camera upgrades, as Apple hints at holding the line by eliminating chargers and ear phones.
Summary of Apple’s Revised 2020 Production Plan
Table 1: iPhone Production by Model
Apple may roll out iPhones with single 5G band support in 2021, say sources: Apple's 2020 series of iPhones will work on both sub-6GHz and mmWave 5G networks, but there is a good chance that the vendor may introduce new models supporting either of the bands but not both for specific markets in 2021, according to sources from Taiwan's IC supply chain.
Existing iPhone models (SE and 11) are doing well and Apple is also producing a few older models (XR and earlier). SE demand is stronger than expected (except in China, where apparently only 5G models are selling), the forecast is now 31m. Some of the iPhone 11 production reflects intentional inventory stockpiling to cover for delays in the ramp up of mass production of new 2020 models. New 2020 models are forecast to reach only 62m units by the end of 2020 due to production delays of 1 to 2 months. Since Apple normally makes between 75m and 80m units a year, assuming a normal pace of sales, production in 1Q 2021 should be stronger than in a typical 1Q. However, this year there has been a marked deterioration in the smartphone sales mix, with flagship models not selling well. (Applies to Huawei and Samsung). Mix deterioration may be a factor, but another reason is the strong sales of the SE and the higher BOM costs of the iPhone 11 due to 5G and camera upgrades, as Apple hints at holding the line by eliminating chargers and ear phones.
Summary of Apple’s Revised 2020 Production Plan
- Q120 -- 39m, up 4% Y/Y; SE2 Production 1m
- Q220 -- 44m, up 39% Y/Y. Based on a 2 month delay for mmWave models and a 1 month delay for sub 6 only models; SE2 Production 13m
- Q320 -- 48m, down 12% Y/Y. New model production focus on 6.06” sub 6 models
- Q420 -- 60m, down 5% Y/Y. Focus on mmWave models
- 2020 Summary – 199m, up 2% Y/Y; SE2 Production 63m; New models 62m
Table 1: iPhone Production by Model
Source: Mizuho Securities
Despite all the hype regarding Apple’s switch to OLED’s, the company still purchased 160m LCDs in 2019 and is expected to buy 121m in 2020 and 112 in 2021. While the volume is declining it still represents about 55.8% of all display purchases in 2020. Sharp was the primary supplier of the newly released SE’s 4.7” display.
Table 2: LCD Model Shipments and Forecast
Table 2: LCD Model Shipments and Forecast
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