Global Smartphone Sales Continue to Decline in January
The author is an analyst of NH Investment & Securities. He can be reached at kyuha.lee@nhqv.com. -- Ed.
In January, global smartphone sales decreased y-y for a seventh consecutive month. We mainly attribute the decline to demand slowdown stemming from the spread of Omicron. While set makers in Greater China continued to perform sluggishly, strong sales sustained at Apple. Apple parts makers are expected to benefit.
Global smartphone sales continued to decline in January
In January, global smartphone sales totaled 113.31mn units (-7.1% y-y, -7.4% m-m), registering a seventh consecutive month of y-y drop. We mainly attribute the slide to demand slowdown due to the proliferation of Omicron in India and Southeast Asia. With sluggish sales at Chinese companies continuing, it is necessary to confirm a sales recovery in order to judge that full-fledged industry improvement has arrived.
By region, all regions (excluding the US) saw y-y decrease. While it is positive that China posted stronger sales (-2% y-y) than other regions, we note that sales decline in India (-7.6% y-y) and other markets (-12.9% y-y) is expanding due to the re-spreading of Covid-19.
Samsung Electronics (SEC) sold 20.45mn units (-1.8% y-y, -14% m-m) in January, logging m-m and y-y decline. Among the overall slowdown in vendor sales in Greater China, Xiaomi (-15.1% y-y) suffered the greatest hit. Meanwhile, Apple achieved a record-high market share (20.6%) in January despite the entering of an off-season thanks to strong sales of the iPhone 13.
Apple is without worries; the problem is Chinese set makers
The recent difference between global smartphone makers is clear. Apple’s sales growth is forecast to continue, backed by the scheduled March release of a new mid-range iPhone SE 3, amid ongoing brisk sales of the iPhone 13 series. In contrast, Chinese set makers continue to perform sluggishly.
In 2H22, Apple is anticipated to post record-high sales once again thanks to the release of the iPhone 14 series, which is expected to enjoy a change in form factor and an upgrade of the main camera unit. Sales improvement at set makers in Greater China seems unlikely without global demand recovery. At SEC, sales should improve towards 2H22.
Expectations for the iPhone 14 series are to pick up in 2H22, and parts makers with a high portion of sales towards Apple such as LG Innotek and BH Flex should reap benefits, including share price growth.