Overall smartphone sales down in China, 5G smartphone sales up

IDC Smartphone Sales Q2 2020 rect

IDC reports that 87.8 million smartphones were shipped in China in the second quarter of 2020, which was down about 10% from the 97.9 million smartphones shipped in Q2 2019. Over 43 million smartphones shipped in China during Q2 2020 were 5G Smartphones, which is a large increase from the around 15 million sold in Q1 2020.

5G smartphone shipments accounted for about half of all smartphone shipments in China last quarter. This could have to do with expanded 5G support by manufacturers. A research manager at IDC says because China began a steady recovery from the COVID-19 pandemic in Q2, manufacturers had the opportunity to expand their 5G support:

”China was slowly recovering in the second quarter while other regions were fighting against the COVID-19 pandemic. This in turn allowed the Chinese vendors to expand their 5G product portfolio in their home market. In 2020Q2, almost half of the smartphones in China were shipped with 5G connectivity”

Will Wong

This large increase in 5G smartphone shipments could also be attributed to the gradual price decrease of 5G smartphones. 5G smartphones were an average of $464 USD in Q2 2020 when the most were sold. When the first 5G phones were released the average cost was $711 USD. The lower cost has probably encouraged more people to buy 5G phones.

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5G smartphone shipments from IDC

While the rest of the market was down, iPhone shipments were up around a million units compared to last year. Apple had a market share of 6.7% in Q2 2019 and 8.3% in Q2 2020. The release of the 2020 iPhone SE helped boost Apple’s sales in China in Q2 2020.

The iPhone SE was released in April, deviating from Apple’s normal pattern of releasing new phones in September. The phone release at a different time yielded to it being an unusual product release from Apple. It’s a budget phone with flagship specs but an older design that is appealing during China’s bad economic state. The extra attention from an off-schedule release along with a more budget-friendly option likely helped sway people toward Apple from the many other budget options available.

The decline in overall shipments isn’t new, Q1 2020 was also down from Q1 2019 by 20%. The Q1 decline in shipments could very likely be attributed to the outbreak of COVID-19. And the Q2 decline is likely also influenced by COVID-19. The decline could also show a general less interest in buying new phones which has been seen in other reports and studies.

Since 5G is performing extremely well in China, Apple could potentially gain more market share by releasing a 5G phone in China. The iPhone 12 could be a great device for Apple in the Chinese market especially if the cheapest model has 5G.

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