Global Mobile Phone Market Continues To Slack 2020 To 5G Mobile Critical Transition Year

Near the end of the year, mobile phone manufacturers are not having a good time.

In December 2nd, Gartner, an information technology research and consultancy company, released statistics. In the third quarter of 2019, the number of smart phones sold to end-users in the world continued to decline, which was 0.4% lower than that in the third quarter of 2018. As consumers pay more attention to cost performance, market demand is still in a weak state.

However, the performance of different manufacturers is not the same. During the quarter, the market share of HUAWEI, Samsung and OPPO increased, and the market share of apple and millet declined. This shift has led Samsung, HUAWEI, millet, OPPO and Vivo to strengthen their entry-level and mid-range product lines. It was this strategy that helped HUAWEI, Samsung and OPPO grow in the third quarter of 2019, while Apple's market share dropped by 1.3% compared with the third quarter of last year.

Analysts believe that a few years ago, any vendor can get a share in the smartphone market, and it is gone forever. But in this mature market, those with core competitiveness will continue to produce the best products.

Li Rui, who consulted CEO in twenty-first Century, said in an interview with the economic news reporters in twenty-first Century that the global economy is in a slump throughout the 2019, especially in the first half of the year, and that the market is also a low point. However, from the next fourth quarters, with the popularity of 5G in a big country like China, the decline in mobile phone sales will begin to slow down and rebound next year. Now that the so-called shipment is not true, many products may still be in stock, not real sales. Li Rui thinks, "5G will also give vitality to the market especially the users. Now the decisive factor of the replacement is not memory, screen, and the extension period is also extended to two and a half years to three years, so 5G is definitely a stimulating factor. The mobile phone market is expected to rebound in the second quarter of next year.

Steady growth for profit

Gartner data showed that in the third quarter, Samsung still took the first place in sales volume of 79 million 50 thousand, while HUAWEI ranked 65 million 800 thousand in 65 million 800 thousand of 17%, while sales in apple dropped slightly from last year to third, while millet performance was good, with 32 million 270 thousand shipments and 8% market share.

For domestic brands, this year it seems that profits have been placed in the most important position. After November 27th, 1810.HK announced its announcement of Q3 and 9 months' performance in 2019. The report shows that Q3 revenue grew 53 billion 660 million, up 5.5% from a year earlier, slightly higher than market expectations. Adjusted net profit of 3 billion 470 million, an increase of 20.3% over the same period. Despite the slowdown in revenue growth, the stock price of millet has been in the doldrums, and the volume of millet mobile phone shipments has also decreased by 1 million year-on-year.

Compared with the other two main businesses, the performance of mobile phones is not ideal. In the first three quarters of 2019, the three main business revenues of millet were: mobile phone 91 billion 300 million, IoT and consumer products 42 billion 600 million, Internet service 14 billion 200 million. Among them, the ratio of mobile phone sales revenue to revenue has dropped from 80.4% in 2015 to 61.1% in the first three quarters of 2019. In the third quarter, only Xiaomi mobile phone business declined. Xiaomi mobile phone business volume and price fell for the first time, its shipments fell 3.6% year-on-year, driving overall revenue down 7.8%.

However, Lei Jun, chairman of the company, said that it was the most profitable season for millet. The achievements of another domestic brand should not be underestimated. HUAWEI achieved two digit growth in smartphone sales in the quarter, and sold 65 million 800 thousand smartphones, an increase of 26% over the same period last year.

Lv Junkuan, senior research director at Gartner, believes that the main reason for HUAWEI's global smartphone sales growth is its performance in the Chinese market. HUAWEI has sold 40 million 500 thousand smartphones in China, and its share in the market has increased by nearly 15 percentage points. In the Chinese market, HUAWEI's powerful ecosystem continues to show growth momentum. "HUAWEI's long-term investment in sub brands (glory and Nova), multi-channel operation (online and retail), and 5G and other technological innovations is the foundation for its success in the Chinese market." Lv Junkuan further pointed out.

On the other hand, although the United States announced a further extension of the grace period for the HUAWEI ban for another 90 days, the ban has actually had a negative impact on HUAWEI in the international market.

Income diversification

As the most notable mobile phone brand, apple iPhone continued to decline in the third quarter of 2019, and sold 408 million 330 thousand units, down 10.7% compared with the same period last year. Even so, smartphone market share is still concentrated on the head brand. In the third quarter of last year, sales of "other" brand smart phones accounted for nearly 40%, but by this year, this proportion has dropped to 35.8%.

Single cellphone hardware income is not enough to support the development of mobile phone brands. In 2019, Q3 and millet Internet service revenue accounted for 5 billion 310 million (8.9% of revenue), an increase of 12.3% over the same period last year. Over the past four quarters, the total income of Internet services has been 18 billion 200 million. IoT and consumer products and Internet services gained 45% and 12% revenue respectively over the same period. This revenue model is being aligned with apple, as Lei Jun said. "Millet is not just a Hard Suits Inc, but an innovation driven Internet Co. Specifically, Xiaomi is a Internet Co with mobile phones, intelligent hardware and IoT platform as its core.

And this strategic thinking has been successfully verified on apple. Apple Corp 2019 fiscal year fourth quarter financial report shows that iPhone sales still account for more than 50% of the company's revenue, but with the change of Apple business attributes, iPhone importance and share is also showing a downward trend. IPhone revenue for the quarter was 33 billion 362 million US dollars, down 9% compared to the same period last year. Service category revenue was 12 billion 500 million US dollars, an increase of 18% compared with the same period last year; Mac quarter revenue was 6 billion 990 million US dollars, down 5% compared with the same period last year; the wearable, home and accessories category revenue was 6 billion 520 million US dollars, up by 54.4% over the same period.

It is an indisputable fact that hardware growth has hit the ceiling. Anshul Gupta, senior research director at Gartner, said that although Apple continues to promote sales and discount activities in various markets, it is still not enough to stimulate global demand. Although sales of iPhone in the Greater China region continued to grow, there was a two digit decline earlier this year. The initial sales of iPhone 11, 11 Pro and 11 Pro Max are good, which indicates that the fourth quarter sales will likely return to positive growth.

In an interview with several industry professionals interviewed by the twenty-first Century economic report, 5G's landing will still bring new impetus to the smartphone industry. Anshul Gupta believes that most smartphone users are no longer low-cost smartphones. Compared with high-end smartphones, smartphone users today are more willing to choose the smart phone with higher cost performance. In addition, smartphone users are waiting for the 5G network to cover more countries and postpone the purchase decision until 2020.

At present, the mobile phone market is nearly saturated, and the market has become a stock competition. Sales have been rising steadily. Improving the intelligence level of smart phones will increasingly become the focus of competition among mobile phone manufacturers. Smart phones will be able to provide personalized content and services based on users' backgrounds and preferences. Roberta Cozza, senior research director of Gartner, believes that in order to provide personalized experience associated with users, manufacturers need to further incorporate artificial intelligence into smart phones, and take security functions and privacy as the key elements of their brands.