Smartphone sales on the rise again amid ‘healthy’ consumer appetite

Global smartphones are on a steep upward curve again as consumer appetites return to “healthy” levels amid the coronavirus vaccine roll-out. 

According to research firm IDC, smartphone vendors shipped nearly 346 million devices during the first quarter of 2021, a rise of 25.5 per cent year-on-year. Asia Pacific – excluding China and Japan – saw some of the strongest global growth, experiencing 28 per cent year-over-year growth, respectively. 

IDC’s figures roughly match up with those of fellow research firm Canalys, which calculated 347 million units, up 27 per cent year on year, shipped in the first quarter. 

Both firms ranked Samsung as the global market leader, accounting for about 22 per cent of smartphone market share and shipping 76.5 million devices during the period. Apple shipped between 52.4 to 55 million iPhones, taking around a 15 per cent share of the market. 

The findings from IDC noted the declines of both Huawei and LG, the latter of which plans to exit the smartphone market altogether, allowing Xiaomi, Oppo and Vivo to carve a niche in the mid-low priced sector. 

Xiaomi clocked its best single-quarter performance ever, growing 62 per cent and shipping 49.0 million units, according to Canalys.

“Despite [LG] losing ground in recent years, they still had 9 per cent of the North America market and 6 per cent of Latin America,” said Ryan Reith, program vice president with IDC's Worldwide Mobile Device Trackers. “Their exit creates some immediate opportunity for other brands. With competition being more cutthroat than ever, especially at the low-end, it is safe to assume that 6-10 brands are eyeing this shared opportunity." 

Canalys analyst Sanyam Chaurasia called LG a stalwart of the smartphone industry, claiming its exit from the market to be significant. 

“It is symbolic of a new era in the smartphone market. It proves that aggressive pricing and channel strategy are more important than hardware differentiation in the modern-day,” he said. “As the smartphone market continues to consolidate, this will not be the last time the incumbent vendors fight over the remains of a defeated brand.” 

According to Canalys, COVID-19 still plays a major role in the smartphone market but is no longer creating a bottleneck in the distribution channel. 

However, the supply of critical components, such as chipsets, has quickly become a major concern, and will hinder smartphone shipments in the coming quarters, explained Canalys research manager Ben Stanton. This will force vendors to continue refiguring their distribution strategies throughout 2021. 

“Some brands, for example, have de-prioritised device shipments in India, amid the new COVID-19 wave, and instead are focusing efforts on recovering regions, such as Europe,” he said. 

“And while the shortages persist, it will grant larger companies a unique advantage, as the global brands have more power to negotiate allocation. This will put further pressure on smaller brands and could force many to follow LG out of the door.” 

The latest figures suggest the supply of available chips won’t be easing anytime soon. The world’s largest chip foundry Taiwan Semiconductor Manufacturing Co. (TSMC) recently claimed the supply crunch will not improve until 2023.

The global uplift stands in contrast to the Australian market, which flatlined in 2020 as users felt the economic impact of the coronavirus pandemic.  

According to a recent report from research Telsyte, local sales of smartphone devices fell from 8.44 million in 2019 to 8.38 million in 2020, with the second half of last year accounting for more than half of sales.