China Smartphone Shipments – October & Singles Day
China’s smartphone shipments saw a large jump in October, far above expectations. 33.6m phones were shipped during the month, up 57.0% m/m and up 28.2% y/y, the highest single month increase since March, reversing the declines of the last two months. While we have no company shipment data specific to October, we expect the unusually strong results for the month were due to the September 24 release date of the Apple (AAPL) iPhone in China. According to JD.com (JD) and other on-line sources, there were at least 5m pre-orders for the iPhone 13 series on just the first day they became available and shipping dates were already moving to the 2nd week in October by the end of the day. Since the bulk of orders would ship in October, it would seem to account for the roughly 10m incremental shipments for the month, especially since the October data reveals that 25 of the 26 new phone models released in China in October were from domestic brands, leaving 1 new model from a non-Chinese brand. The ‘iPhone bounce last year, seen in November, was a bit muted due to COVID-19.
5G smartphone shipments in China also increased in October, increasing to 26.6m units, up 76.2% m/m and up 58.7% y/y, reaching near the peak months of January and March this year. Again, the increase of 11.5m units m/m would likely reflect the strong iPhone 13 shipments as all four iPhone models are 5G ready. 5G phones made up 79.2% of overall shipments in China in October, maintaining a share between 70% and 80% for much of the year, and 61.5% of domestic new models. Based on 5 year averages, total shipments for China’s phone market in 2021 should be ~347m units, which would be up 12.3% y/y. We make the assumption that November and December generate ~65m units shipped.
Early data on smartphone sales during China’s Single’s Day holiday (11/1 to 11/11) indicate that sales were down 0.7% y/y to ~12.9m units, due to the earlier release of the iPhone this year and the continuing weakening of Huawei’s (pvt) smartphone business. Local brands Vivo (pvt) and Xiaomi (1810.HK) took the top sales share at 20% and 19% while Apple came in 3rd at 18%. Huawei saw a meager 7% share of holiday sales, while former Huawei brand Honor (pvt) came in at 13%, almost double its former parent. Alibaba (BABA) saw a GMV[1] of $84.5b, up 8.5% y/y, below the $86b to $90b forecasted, while JD.com fared better overall at $54.6b, up 28.6% y/y although a bit less than last year’s 33% gain.
With the potential for the first y/y increase in Chinese phone shipments since the peak in 2016, the Chinese press is extolling the ‘glorious recovery’, leading to ‘years of prosperous expansion in the industry’. While this is certainly looking like a better year than the previous four, it is still only a single year indicator during a two year period that saw the world mired in a devastating pandemic which has destabilized the CE space and created many pockets of both positive and negative growth. We have no vested interest in the Chinese smartphone market other than as an observer, and would wait a bit before calling a secular trend.
[1] Gross Merchandise Volume – A non-specified measure used by Chinese retailers.
5G smartphone shipments in China also increased in October, increasing to 26.6m units, up 76.2% m/m and up 58.7% y/y, reaching near the peak months of January and March this year. Again, the increase of 11.5m units m/m would likely reflect the strong iPhone 13 shipments as all four iPhone models are 5G ready. 5G phones made up 79.2% of overall shipments in China in October, maintaining a share between 70% and 80% for much of the year, and 61.5% of domestic new models. Based on 5 year averages, total shipments for China’s phone market in 2021 should be ~347m units, which would be up 12.3% y/y. We make the assumption that November and December generate ~65m units shipped.
Early data on smartphone sales during China’s Single’s Day holiday (11/1 to 11/11) indicate that sales were down 0.7% y/y to ~12.9m units, due to the earlier release of the iPhone this year and the continuing weakening of Huawei’s (pvt) smartphone business. Local brands Vivo (pvt) and Xiaomi (1810.HK) took the top sales share at 20% and 19% while Apple came in 3rd at 18%. Huawei saw a meager 7% share of holiday sales, while former Huawei brand Honor (pvt) came in at 13%, almost double its former parent. Alibaba (BABA) saw a GMV[1] of $84.5b, up 8.5% y/y, below the $86b to $90b forecasted, while JD.com fared better overall at $54.6b, up 28.6% y/y although a bit less than last year’s 33% gain.
With the potential for the first y/y increase in Chinese phone shipments since the peak in 2016, the Chinese press is extolling the ‘glorious recovery’, leading to ‘years of prosperous expansion in the industry’. While this is certainly looking like a better year than the previous four, it is still only a single year indicator during a two year period that saw the world mired in a devastating pandemic which has destabilized the CE space and created many pockets of both positive and negative growth. We have no vested interest in the Chinese smartphone market other than as an observer, and would wait a bit before calling a secular trend.
[1] Gross Merchandise Volume – A non-specified measure used by Chinese retailers.
China Smartphone Shipments & Y/Y ROC - 2019 - 2021 YTD - Source: SCMR LLC, CAIST
China 5G Smartphone Shipments & Share - Source: SCMR LLC, CAICT
China Smartphone Shipments Yearly & ROC - Source: SCMR LLC, CAICT, Various
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