Vertical Divider
Smartphones
Market Research
April 12, 2020
For 2020, Mizuho lowered its forecast for total volume from 1,430m units to 1,300m shipments (down 10% Y/Y). Looking ahead, they forecast shipments of 1,410m units in 2021 (up 8%) and 1,470m units in 2022 (up 4%). They believe it will take two years (2021–2022) for smartphone shipments to climb back to near the 1,500m units previously forecasted for 2020 before COVID-19. Samsung Electronics, will be impacted by their high weighting of sales in Europe and emerging markets. Among Chinese brands, Huawei is doing relatively well, both in terms of current sales (sales apparently topped production by at least 10m units in 1Q thanks to increased emphasis on liquidating inventory) and 2Q output projections. However, Xiaomi, which was hurt least through February because it sells mainly via the online channel, is starting to feel the impact of declining demand in India, Southeast Asia, and other overseas markets. OPPO and vivo are being impacted similarly. Therefore, forecasts for these brands were lowered. Although Chinese brands’ inventories of 4G models are trending downward, they still appear to be excessively high (at least 30 days of inventory), so there is a strong probability that shipments will exceed production volumes this year. Apple’s shipment forecasts was lowered —albeit slightly—mainly to reflect the possibility that it may have to curb volumes of new models, due to the deterioration in the demand environment and the amount of its 1Q production shortfall from supply chain disruptions that cannot be made up in 2Q.
For Chinese brands, forecasts particularly for Huawei, were raised because the clearing of 4G inventories is likely to wind down in 2Q, mid- and high-end models (Honor/Nova) as well as flagship models (P/Mate) are basically migrating to 5G starting in 2Q, and infrastructure upgrade work in China (carrier equipment bidding, base station installation) has been catching up and gradually getting back on track since March. In countries other than China (e.g., US, Japan, etc.), the pace of infrastructure upgrades has slowed, and therefore forecasts for Samsung Electronics and Apple were lowered to account for the risk of a decline in demand for 5G smartphones. Although, new models launched by Apple this autumn will be 5G capable, forecasts were lowered slightly to account for the risk of delays in 6.7-inch model releases. Overall demand should get back to the pace established prior to the novel coronavirus crisis by the second half of 2021 and the medium- to long-term outlook for the 5G smartphone market remains bullish.
Table 1: Global Smartphone Shipments – 2019, 2020, 202 Revised for COVID-19
Market Research
April 12, 2020
For 2020, Mizuho lowered its forecast for total volume from 1,430m units to 1,300m shipments (down 10% Y/Y). Looking ahead, they forecast shipments of 1,410m units in 2021 (up 8%) and 1,470m units in 2022 (up 4%). They believe it will take two years (2021–2022) for smartphone shipments to climb back to near the 1,500m units previously forecasted for 2020 before COVID-19. Samsung Electronics, will be impacted by their high weighting of sales in Europe and emerging markets. Among Chinese brands, Huawei is doing relatively well, both in terms of current sales (sales apparently topped production by at least 10m units in 1Q thanks to increased emphasis on liquidating inventory) and 2Q output projections. However, Xiaomi, which was hurt least through February because it sells mainly via the online channel, is starting to feel the impact of declining demand in India, Southeast Asia, and other overseas markets. OPPO and vivo are being impacted similarly. Therefore, forecasts for these brands were lowered. Although Chinese brands’ inventories of 4G models are trending downward, they still appear to be excessively high (at least 30 days of inventory), so there is a strong probability that shipments will exceed production volumes this year. Apple’s shipment forecasts was lowered —albeit slightly—mainly to reflect the possibility that it may have to curb volumes of new models, due to the deterioration in the demand environment and the amount of its 1Q production shortfall from supply chain disruptions that cannot be made up in 2Q.
For Chinese brands, forecasts particularly for Huawei, were raised because the clearing of 4G inventories is likely to wind down in 2Q, mid- and high-end models (Honor/Nova) as well as flagship models (P/Mate) are basically migrating to 5G starting in 2Q, and infrastructure upgrade work in China (carrier equipment bidding, base station installation) has been catching up and gradually getting back on track since March. In countries other than China (e.g., US, Japan, etc.), the pace of infrastructure upgrades has slowed, and therefore forecasts for Samsung Electronics and Apple were lowered to account for the risk of a decline in demand for 5G smartphones. Although, new models launched by Apple this autumn will be 5G capable, forecasts were lowered slightly to account for the risk of delays in 6.7-inch model releases. Overall demand should get back to the pace established prior to the novel coronavirus crisis by the second half of 2021 and the medium- to long-term outlook for the 5G smartphone market remains bullish.
Table 1: Global Smartphone Shipments – 2019, 2020, 202 Revised for COVID-19
Source: Mizuho Securities
Table 2: China Smartphone Shipments Revised
Source: Mizuho Securities