Earlier today, a market research firm, CINNO Research released the operation of the Chinese smartphone market in May this year. What is more special is that the statistical dimension is divided according to the mobile phone processor or SoC. In terms of total, Chinese shipments of SoC terminals for smartphones in May were about 19.12 million. This is a month-on-month recovery and an increase of 8.6%. However, year on year, this is still a decrease of about 19.7%. In terms of brands, MediaTek shipped 8.4 million SoC chips, ranking first in the industry. The Taiwanese chip maker records an increase of 15% month-on-month and a year-on-year decrease of about 3.3%.
Qualcomm came in second with 6.5 million shipments, an increase of 4.1% month-on-month and a year-on-year decrease of about 16%. In third to fifth positions are Apple, UNISOC and HiSilicon respectively. UNISOC Tiger chips are mostly entry-level and at best mid-range chips that appear mainly on Chinese smartphones. Considering that there are not many chipmakers globally, UNISOC has a spot on the top five list.
Global chip market will not have changes anytime soon
We can see that the shipment of HiSilicon chip mobile phones in the month was less than 400,000 units, a year-on-year decrease of 81.5%. The company’s ranking also hit rock bottom. Of course, this situation is not a surprise because of the ban on Huawei. The company can no longer produce or upgrade its HiSilicon chips because of its use of American technologies. However, the company is slowly overcoming the ban’s grip and in the coming years, it may resume regular operation.
Apple will also have more influence in the smartphone market due to the absence of Huawei. However, Apple will not want to take other Chinese manufacturers for granted. IDC released a report on the market share of smartphones in the price segment above $600 in the first half of 2020. Among mobile phones exceeding $600, Huawei ranks first with 44.1%, and Apple ranks second with 44%. In the first quarter of this year, IDC released data on China’s market share in the price range above $550. Apple ranks first with a market share of 56.9%. Huawei still ranks second but its share dropped to 23.6%.
Of course, it is worth noting that, according to the price range, in the high-end smartphone SoC market of more than 4,000 yuan ($595), Apple accounts for about 71.1%, an increase of about 8% year-on-year. For the entry-level smartphone SoC within 2,000 yuan ($297), MediaTek account for about 70.9% in May. Looking forward to the second half of the year, the agency believes that the market is in a stage of adjustment. Furthermore, it believes that there will be no fundamental or significant recovery. To this end, there will not be any significant changes in the smartphone market.
Pandemic had an impact on the market
The global economy slowed down and the willingness to spend declined. Although Chinese smartphones recovered in May, the impact of the epidemic has not subsided, and the market has yet to recover. At the same time, the deep reason why the public is not enthusiastic about mobile phone consumption is that the functional performance has not changed much and the switching power is insufficient. Statistics from CINNO Research show that in May, the shipment of smartphone SoC terminals in mainland China was approximately 19.12 million. This is an increase of approximately 8.6% month-on-month and a year-on-year decrease of approximately 19.7%.
The bleak Chinese mobile phone market directly affects the shipments of mobile phone SoCs. However, relative to the lowest level in April this year, the data in May recovered to a certain extent. According to data from CINNO Research, the shipment of smartphone SoCs in mainland China in May was approximately 19.12 million. This is an increase of approximately 8.6% month-on-month and a year-on-year decrease of approximately 19.7%.
The concentration of Chinese smartphone SoC brands still hit more than 90%, and the market share of the top three brands in May was about 93.7%. MediaTek’s SoC shipments are gradually distant from Qualcomm. This indicates that MediaTek’s chip supply is gradually increasing and the company is enlisting more brands. Qualcomm transferred some orders back to TSMC for production, which delayed the supply of chips to a certain extent. This also disrupted the product release and listing of brand manufacturers, and resulted in insufficient supply in the market.
Price – Shipment
In terms of the price range, the proportion of SoCs for high-end mobile phones between RMB 4,000 ($595) – 5,999 ($892) in the total shipments of SoC terminals for smartphones in mainland China in May increased to 13.2%. This is an increase of about 5.6% year-on-year and it is the most obvious increase in recent times. For ultra-high-end mobile phones above RMB 5999 ($892), the proportion of SoCs dropped to 8.5%. This is a year-on-year decrease of about 6.4%, a significant drop.
It is worth mentioning that in May, the sales volume of Honor terminals in the smartphone market in mainland China was about 3.2 million units, ranking first in monthly sales. About 500,000 pieces, an increase of about 9.4% month-on-month. So far, in May, UNISOC’s smartphone SoC terminal shipments surpassed Huawei Hisilicon, ranking fourth.
CINNO Research believes that although the Chinese smartphone market showed signs of stabilizing in May, the market recovery momentum was still insufficient. Under the circumstances of high inventory levels of major manufacturers and little enthusiasm for consumer replacement, the market is in a stage of adjustment. The expectations are that in 2022, there will be no fundamental recovery in the mobile phone market in the second half of the year. This also means that there will be no significant recovery for the smartphone processor market. Thus, MediaTek will remain tops for some time.