Market Exposure

services. This will likely lead to operators being able to upsell to larger data packages with higher ARPUS,” said Pathak.

Covid-19 has also impacted the pace of 5G rollouts in some countries. Varun Mishra, Research Analyst at Counterpoint Research, said, “Covid-19 has disrupted the implementation plans of 5G in some countries, with auctions being postponed in markets like Spain and India. However, led by Huawei, the growth of 5G in China remains as expected. As the situation returns to normal, the 5G sales will be further driven by OEMS including Samsung, Oppo, Vivo, Xiaomi and Realme launching devices in the sub $300 price band. This is likely to be complemented by SOC players launching cheaper 5G-capable chipsets. The share of 5G smartphones increased to 8% in Q1 2020, compared to 1% in Q4 2019. 5G is likely to help rate of recovery during the second half of 2020.”

The combined market share of the top 10 brands has increased to 83%, from 80% in Q1 2019. The consolidation trend is likely to continue, as smaller brands, with a higher offline distribution, are likely to be affected more by the pandemic. As expected, due to the pandemic, all the major OEMS declined during the quarter, except Xioami (7% YOY) and Realme (157% YOY). This is partly because, India, which is the largest market for both these brands, implemented a severe lockdown in the last week of March.

The ongoing effect of the pandemic on the smartphone market is likely to be worse in the second quarter. The impact on the OEMS will depend on the markets, channels, and price bands they operate in with some OEMS affected more than others.

• Demand Side: The China market is recovering, while the many other major markets are under lockdown. Depending on the severity of the pandemic, the recovery in some of these markets could also take longer. Going forward, brands with a larger share in China, like Huawei, are in a better position than brands like

Samsung, for which almost all its major markets remain under lockdown. • Supply Side: In Q1 2020, OEMS with components and factories in the worst hit areas of China were exposed the most, for example, Lenovo. In the second quarter, the trend will be reversed, as China’s manufacturing recovers, but many other manufacturing centers are closed.

Sales Channel

The brands with higher online presence

• Samsung led the smartphone market during the quarter capturing one-fifth of the global smartphone shipments. The OEM declined 18% YOY during the quarter and is expected to see a steeper decline in Q2 2020.

Huawei continued its push in China and surpassed Apple again during the quarter. The OEM declined 17% YOY during the quarter. Over half of the smartphone shipments for Huawei are now in China.

Apple remained resilient even during the Covid-19 as iphone shipments declined only 5% YOY during the quarter. The iphone revenues were down 7% YOY for the same period. The impact on some European and Asian countries was mild.

Xiaomi grew 7% YOY during the quarter. The OEM continued to lead the India smartphone market reaching its highest ever market share (30%) since Q1 2018.

• Compared to other major OEMS, Vivo declined less (10% YOY) during the quarter. A strong performance in the Indian smartphone market partially offset declines in other markets.n