Apple iPhone Archives - Counterpoint

Longer Waits This Year for Buyers of iPhone 15 Base and Pro Max

Pre-order delivery wait times for iPhone 15 base and Pro Max models significantly higher than previous generation
High demand coupled with initial supply constraints likely factors driving Pro Max’s delivery times to record high during pre-order week
iPhone 15 base model also seeing high wait times; China at 4X that of iPhone 14.

Boston, Seoul, Beijing, New Delhi, London – September 25, 2023

Delivery times on pre-orders for the iPhone 15 and 15 Pro Max came in significantly higher than corresponding iPhone 14 models across key markets, according to Counterpoint Research’s Apple 360 Service. The US was a prime example, with buyers of the base and top-end model having to wait 4 and 9 days longer, respectively, than those last year; Plus and Pro buyers will receive their devices up to two weeks faster.

Source: Counterpoint Research Apple 360 Service.
*iPhone 15: Sep 15 – 21, 2023 and iPhone 14: Sep 9 – 15, 2022; excludes weekends.
Note iPhone 14 Plus available from Oct 7, 2022 vs Sep 16, 2022 for other iPhone 14 models.

“I don’t think it’s a big surprise the Pro Max is showing longer wait times than its predecessor,” says Senior Analyst, Manufacturing, Ivan Lam. “It’s normal to experience hiccups when you’ve got significant upgrades on complex mechanisms like the camera module. But looking at wait times this weekend as the product starts selling in stores, it looks like availability is moving in the right direction and normalizing.”

Commenting on the iPhone 15, Jeff Fieldhack, Research Director for North America, notes, “The introduction of premium features like Dynamic Island previously exclusive to the Pro lineup has really increased its appeal to the general consumer base. It’s basically an iPhone 14 Pro at base level price and paired with the new aesthetic updates has created more incentives for users to upgrade this year.”

In the run up to Friday’s general release, the base model saw stronger than expected wait times in China, where domestic competitors are jostling to grab share in the premium segment which has been relatively unaffected by the overall market malaise. Most notable has been the rise and popularity of flip-style foldables as well as Huawei’s much anticipated launch of its Mate 60 Pro, which some are seeing as a direct competitor to the iPhone.

“What’s a bit surprising are the base model iPhone 15 wait times in China, which were 4X more than last year on launch day. We were expecting them to come in a lot lower – maybe on par with last year – based on all the discounting we saw on the 14 series during H1,” reflects Archie Zhang, Research Analyst, China. “But it could just be a sign Apple’s still ramping up supply as we move into the busiest quarter.”

“And as far as ultra-premium is concerned, the Pro Max is still the most coveted iPhone in China with long delivery wait times reflecting this,” adds Zhang. “But they’re similar to last year at the moment, and with scalper premiums way down, it could be a combination of less appetite for impulse buying amongst consumers and a similar demand-supply profile as last year.”

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

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iPhone 15 Sales Launch Day: Pro Max Demand High in US

Footfalls at Apple Stores in the US were up on the launch day for iPhone series sales, with the iPhone 15 Pro Max being the top model in demand.
Delivery times for all models are becoming longer compared to the iPhone 14 series launch.
eSIM activation process has become smoother with the second eSIM-only iPhone launch.
Apple Store executives are heavily pushing the gaming aspect of the new Pro series.

Apple Store sales for the iPhone 15 series started in the US on September 22, with people lining up outside the stores across the country to get their hands on the devices. This year felt a bit different compared to the previous three years –wait queues seemed to be much longer and more in-person shopping was done. Gone were the COVID-19 distancing measures and online-order pushes from Apple and carriers alike. Here are the five big takeaways from the sales launch day:

Store traffic for Apple locations is up while carriers see limited uptake: It seems we are back to waiting in long lines to purchase new Apple products during launch season. Just like last year’s launch, Tim Cook opened the sales at Apple’s 5^th Avenue store in New York and greeted customers personally. Carrier stores, on the other hand, saw limited traffic and constrained iPhone inventory as Apple more tightly controls the supply during launch.

iPhone 15 Pro and Pro Max are selling out or very limited quantity remains: As we have seen in previous launches, the Pro versions tend to have stronger demand as early adopters eagerly wait to upgrade their devices. The iPhone 15 Pro Max is the top model in demand.

Delivery times are increasing, even for the base models: Demand for all iPhones has increased compared to last year. Apple is projecting delivery dates of October 4-9 for the iPhone 15 and 15 Plus models and October 23-30 for the Pro models on the launch day for the base memory configuration and black color models. In comparison, the iPhone 14 only had a slight lag of four days for delivery while the iPhone 14 Pro models saw delivery times in the 4-5-week range – similar to the iPhone 15 Pro models.
eSIM issues have largely subsided: When Apple first came out with eSIM-only iPhones last year, there were many issues with the initial transition from physical SIM swaps to eSIM. Carriers had to massively adjust their activation process and due to the large demand for iPhones during the launch, there were some bottlenecks that caused long delays for customers waiting to have their numbers transferred. Store representatives say this year the process has been much smoother and quicker.
iPhone 15 Pro Max is being heavily promoted as a gaming machine: Store representatives have been given several talking points around the iPhone 15 Pro Max’s gaming capabilities. From hardware-accelerated ray tracing and a new 6-core GPU to USB-C-enabled 4K gaming on an external monitor, the new Pro series devices are being pushed as viable alternatives to consoles and other Android devices alike.

Apple Vision Pro: A Trillion-dollar Insurance Policy

At the launch of the iPhone 15 and Watch 9 series this week, Apple mentioned that it was on track to release the Apple Vision Pro, which it announced in June this year, in early 2024. It has also included some features in the new iPhone and Apple Watch that are consistent with its Vision Pro development:

A double-finger tap gesture can be used to select actions in the Apple Watch 9. The gesture uses a mix of sensor inputs processed by the Watch 9’s upgraded neural engine to identify the prompt. While the Apple Vision Pro uses cameras to spot gestures, the new Watch interactions will engender the use of subtle hand gestures that will also be used to interact with the Apple Vision Pro.
The new iPhone 15 Pro and Pro Max cameras can record images and videos stereoscopically. When viewed via the Vision Pro, the images and videos will have depth and provide a more immersive experience.

In our analysis of the Apple Vision Pro, we highlight that it is the most complex consumer electronics product ever made. And it is already causing a shift in approach by its rivals.

Nevertheless, we still believe that Apple is using the Vision Pro essentially as an insurance policy. The majority of Apple’s revenue and profit is derived from the iPhone product line, and related products and accessories – Watch, for example, would not exist without iPhone.

Therefore, iPhone is the core of Apple’s almost $2.75-trillion market cap (at the time of writing). Apple is bound to do anything in its power to defend the iPhone’s market position.

For a long time, people have speculated that the product most likely to replace the smartphone as their primary interface with digital life will be some sort of augmented reality device. So far, the eXtended Reality (XR) market has been disappointing – generating a few 10s of millions of unit sales but not a huge amount of consistent usage, apart from some niche enterprise use cases. Furthermore, the technical challenge of making true augmented reality glasses has proven to be beyond the capabilities of even the most technically gifted companies.

Apple is therefore not immediately threatened by the slowly developing XR industry. But would it be wise for it to sit on the sidelines and watch while potential competitors work on what might, one day, be a product that can truly compete with its iPhone revenue stream? Of course not, and it hasn’t.

For Apple, the worst possible outcome would be if the XR segment took off strongly and it did not have a product in the game. Even if Apple spends a few billion dollars developing its XR products and the market still doesn’t take off, it would be costly but scarcely make a dent in its ample cash reserves.

So, Apple has made the logical choice and invested in creating the Apple Vision Pro. Along the way, it has amassed an impressively large patent portfolio that it can use to defend its position.

If, ultimately, the XR market does take off, Apple will be in a prime position to exploit the opportunity. However, if it continues to behave as an interesting niche market, then Apple has cemented its place by having a product that will be used to measure all others.

Subscribing clients can read our full analysis of the Apple Vision Pro that also includes sales projection scenarios.

AI, Digital Twins, Real-time Compute Emerge as Top Technology Trends for 2023

Counterpoint believes that Artificial Intelligence (AI), Digital Twins and Edge Computing will emerge as top technology trends in 2023, affecting the whole tech industry.
Other trends that will be seeing lots of investments and progress include – Artificial Intelligence, Blockchain in IoT (ABIoT), Zero trust Architecture (ZTA) in Cybersecurity, West-China Technology Investments for Technology reshoring, eSIMs, XR and Sustainability

New Delhi, Beijing, Seoul, Hong Kong, London, Buenos Aires, San Diego – February 26, 2023

We have entered 2023 at a time when geopolitical tensions are at their highest and markets are fragile due to macro factors, especially in the technology sector. Talks of recession, inflation, higher interest rates and declining consumer spending make it extremely judicious for businesses to invest in innovation.

With the report Technology Trends 2023 we aim to highlight the catalysts and trends that will influence technological developments and adoption in 2023. We have chosen trends that are at their inflection point in 2023 by observing a multitude of evidence available for these anchor technologies.

Commenting on the Technology Trends for 2023, Associate Director Mohit Agrawal commented, “We will be seeing a lot of proliferation of AI use cases across industries with the success that ChatGPT saw through its release; Conversational chatbots and text using generative AI are ready for prime time in 2023 followed by code writing early next year. Meanwhile, images, audio and videos may take another two to four years before they start to make a serious impact.”

“The magnitude with which we have seen companies launching AI-based solutions at Mobile World Congress (MWC), Barcelona 2023, from telecom to manufacturing, is immense. The solutions reflect the prevalence of AI in even the most basic of tasks to the most complex ones.”

Agarwal further added, “The confluence of AI and Blockchain in IoT would initiate the era of ABIoT. IoT plays a vital role in collecting data through sensors, facilitating two-way communication and enabling action. AI takes on the responsibility of ‘thinking’ by analyzing the large data sets generated by IoT and mimicking human-like intelligence. Meanwhile, blockchain ensures secure, immutable and transparent record-keeping to ‘enable transactions.’ When these three technologies are combined, they can create substantial value for any organization and enable new business models.”

Real-time computing is another trend that has seen lot of activity, on which Senior Analyst Akshara Bassi commented, “Real-time computing or Edge computing is becoming ubiquitous in 2023. End customers and companies are heavily using technologies that synthesize real-time data to deliver insights to help improve consumer experience with existing technology hardware and the efficiency of processes. The proliferation of IoT and 5G has accelerated the demand for compute at the Edge as reflected by the investments by Cloud players in real-time computing applications to the rise of Edge-based SaaS solutions.”

A trend summary for technologies that will course through 2023:

Dawn of AI, Blockchain and IoT (ABIoT): The AI, blockchain and IoT trinity is of immense significance in the world of technology. ABIoT uses blockchain, AI and IoT to enhance trust and security, test various usage-based business models and scale the deployment to an intelligent level that can glean insights to make operations efficient.
Rise of Digital Twins: In 2023, we are entering the era of Cognitive Digital Twins. These virtual replicas function autonomously and use AI for making decisions. These digital twins use AI to reflect and simulate assets, machines and processes in real time.
Cybersecurity – Zero Trust Architecture a Necessity: Cybersecurity has become more crucial than ever due to the rapid digital transformation taking place across industries and the transition to Web 3.0. The legacy security architecture, which is based on the defense-in-depth methodology is now lacking due to the presence of a true perimeter, making it inadequate. Zero Trust Architecture (ZTA) is emerging as the solution to fill the gaps that the legacy architecture failed to cover.
Real-time Compute to Become Ubiquitous, Supported by Cloud Providers: Digital transformation has made the Cloud ubiquitous within a company’s IT infrastructure. But the implementation of 5G and the proliferation of IoT devices has necessitated Edge to become more intelligent and embrace an active compute role to deliver real-time data insights.
Generative AI to Make Big Leap Forward in 2023: The unprecedented success of ChatGPT has reignited interest in the cutting-edge field of generative AI. Generative AI has the potential to revolutionize content creation, affecting industries such as marketing, design, entertainment, software development and media organizations. On one hand, it democratizes content creation, yet on the other, it has the power to completely disrupt the current content creation landscape.
West-China Rivalry to Amplify in Technology Sector: There is a simmering rivalry between the West and China, especially in the technology industry, which is likely to amplify further in 2023 as the respective governments take decisive steps to deleverage. In October last year, the US announced curbs on technology exports intending to cut off Chinese companies from access to advanced semiconductors made anywhere in the world from US equipment or know-how.
eSIMs – Ready for Prime Time: 2022 was a landmark year for the eSIM ecosystem and eSIM is now rapidly moving towards becoming the preferred mode of cellular connectivity. More than 260 MNOs/MVNOs now support eSIM, and they support more than 35 consumer devices on an average. However, in 2023, we expect a significant increase in the adoption of eSIM technology, with an expected one in four IoT modules equipped with eSIM.
XR – Recalibration of Strategy, New Opportunities Emerge: Key players in the XR space are recalibrating their strategy in 2023 as consumers and enterprises await the promised XR experience. Recently, Qualcomm, Google and Samsung announced a partnership to work on a mixed reality (MR) platform by bringing together Qualcomm’s Snapdragon XR Tech, Google’s expertise in experiences and Samsung’s product capabilities. Meanwhile, Apple is expected to launch its MR headset soon.
Sustainability – Technology Services Championing the Cause: Humanity continues consuming the Earth’s resources 1.75x faster than its capacity for biological replenishment. Consequently, companies are becoming conscious of their usage of resources and the efficiency of their business processes. Companies are using technology to achieve end-to-end visibility concerning all processes by sensing and tracking data at each touch point and possibly altering the process flow to achieve greater efficiencies and lower carbon footprint by using AI in conjunction with physical decision making.
IoT – Consolidation Expected to Accelerate: The IoT value chain is highly fragmented with over 4,000 players competing for a share of the market. This intense competition has led to a squeezed margin and has hindered the ability of players to expand into adjacent areas of the value chain. As economic conditions push investors to prioritize profitability, de-fragmentation through mergers and acquisitions would become all too common in 2023.

The comprehensive and in-depth “Technology Trends – 2023” report is available. Please contact Counterpoint Research to access the report.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the technology, media and telecom (TMT) industry. It services major technology and financial firms with a mix of monthly reports, customized projects, and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Mohit Agrawal

Akshara Bassi

Neil Shah

Counterpoint Research

press@counterpointresearch.com

report.counterpointresearch.com

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MEA Smartphone Shipments Drop 12% YoY in 2022 to Reach Lowest Level Since 2015

MEA smartphone shipments retreated 18.4% YoY in Q4 2022 and 12.1% YoY in 2022.
At 148 million units, 2022 shipments were the lowest since 2015.
Samsung performed resiliently in 2022, with shipments and market share increasing YoY.
Transsion Group’s 2022 shipments dropped 13% YoY. This was mainly due to a 27% drop of itel.
Xiaomi saw a flat year but much better performance than in 2021.
5G shipments increased 47% YoY to account for 18% of the overall shipments.

London, Boston, Toronto, New Delhi, Hong Kong, Beijing, Taipei, Seoul – February 23, 2023

Smartphone shipments in the Middle East and Africa (MEA) region fell 12.1% YoY in 2022 to 148 million units, the lowest shipment level since 2015, according to the latest research from Counterpoint’s Market Monitor Service. After a bright start to the year, the rise in energy and agricultural goods prices caused by the Ukraine war dampened consumer sentiment in the region, with the macroeconomic situation gradually worsening as the year went on.

Looking at the fourth quarter, smartphone shipments dropped 18.4% YoY, a slightly better reading than the record low of the 20.4% drop recorded in Q3 2022. Consumer sentiment may have picked up marginally as the inflationary pressure and foreign currency headwinds receded. Still, the market environment remained very challenging.

Commenting on the market’s performance, Senior Analyst Yang Wang said, “The MEA smartphone market closed the year with another tough quarter. Much of the difficulties, such as high inflation rates, energy and food prices, and depreciating domestic currencies against the US dollar, were caused by factors outside of the control of market participants. With the drop in consumer sentiment, OEMs were put under enormous pressure and had to take drastic measures such as destocking, cutting marketing and channel spending, and taking a very careful approach to pricing.”

Source: Counterpoint Research Market Monitor, Q4 2022
Notes: Xiaomi includes POCO and Redmi; OPPO includes OnePlus; Figures may not add up to 100% due to rounding.

Market leader Samsung saw YoY volume and market share growth in 2022, a terrific performance given the market realities. This was due to the success of the Galaxy A series in capturing the market for aspirational upgraders, particularly those that may be getting their first 5G devices. The company also benefitted from a significantly improved supply chain position, giving distributors clarity and certainty in a time of turbulence.

Transsion Group brands continued to take the MEA region’s biggest share of smartphone shipments, with an unchanged market share of 32%. However, the company endured a volatile year, with TECNO and itel both shedding shipment volumes in double digits due to exposure to the price-sensitive entry segment, while Infinix’s strong momentum from the first half of 2022 retreated towards the end of the year. Aggressive destocking initiatives mostly bore fruit, as TECNO and Infinix returned to launching higher-end devices during the shopping season.

Xiaomi finished the year at the third spot among OEMs in the MEA region. It was a relatively successful year for the company with volume and market share gains. Supply issues largely disappeared, and the company saw good traction in the mid-range segment, particularly for the Redmi Note 11 and Redmi 10 series. Xiaomi is expected to take the competition to Samsung’s A series as it broadens the availability of affordable 5G devices across the region.

Apple’s shipments dropped YoY, but the brand saw its market share increase due to broadened distribution in the region and the success of the iPhone 13 series. The iPhone 14 series launch has not been as successful as the iPhone 13 series. However, sales have concentrated towards the higher-end iPhone 14 Pro and Pro Max models, thus replicating Apple’s value gains seen in other more developed markets.

Source: Counterpoint Research Market Monitor, Q4 2022

One of the spotlights in the MEA smartphone market in 2022 was the growth of the 5G segment. 5G smartphone shipments grew 47% to reach an 18% share of the overall shipments against our forecast of 16.5% at the beginning of 2022. While 5G networks are only available in the GCC countries and certain pockets of Africa’s urban areas, the enthusiasm for 5G devices has been noted across the largest markets. Samsung, having overtaken Apple as the biggest 5G OEM in the region, is well positioned to grow further with its large portfolio of mid-range 5G A-series devices. Xiaomi is also seeing momentum for its mid-range devices, and we are likely to see Transsion brands TECNO and Infinix make a serious play in the 5G market in 2023. While globally 5G smartphone prices are coming down due to the availability of more affordable models, the proliferation of 5G devices in MEA will actually boost the average selling price (ASP) in the region, as customers upgrade to more sophisticated devices. This, in turn, is likely to increase the dollar value of the MEA smartphone market, despite little to no growth in volume expected in 2023.

Counterpoint Research’s market-leading Market Monitor, Market Pulse and Model Sales services for mobile handsets are available for subscribing clients.

Feel free to contact us at press@counterpointresearch.com for questions regarding our in-depth research and insights.

You can also visit our Data Section (updated quarterly) to view the smartphone market share for World, USA, China and India.

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MEA Smartphone Shipments Decline 20% YoY in Q3 2022 as Macro Situation Worsens

MEA smartphone shipments retreated 20.4% YoY and 12% QoQ in Q3 2022 to 35 million units.
This was the lowest level since Q2 2020, or since the start of the COVID-19 pandemic.
Samsung’s shipments and market share increased YoY as the new A-series models continued to gain momentum.
Transsion Group’s shipments led the market downturn, mainly due to TECNO and itel’s aggressive destocking efforts. Infinix, on the other hand, remained resilient to market headwinds.
Xiaomi returned to growth as product availability improved, while its exposure to the Middle East market benefitted from improving sentiment.

London, Boston, Toronto, New Delhi, Hong Kong, Beijing, Taipei, Seoul – December 19, 2022

Smartphone shipments in the Middle East and Africa (MEA) region fell 20.4% YoY and 12% QoQ to 35 million units in Q3 2022, according to the latest research from Counterpoint’s Market Monitor Service. Compared to the previous quarter, the macro situation continued to worsen as inflation undermined consumer sentiment, while OEMs became ever more cautious in areas such as distribution expansion, marketing efforts and stock management.

MEA Smartphone Quarterly Unit Shipments

Source: Counterpoint Research Market Monitor, Q3 2022
Notes: Xiaomi includes POCO and Redmi; OPPO includes OnePlus; Figures may not add up to 100% due to rounding.

Commenting on the market’s performance, Senior Analyst Yang Wang said, “The biggest issue in the smartphone market, and indeed any consumer market, this year has been macro issues. We saw no let-up in inflationary pressures and currency headwinds in the MEA market in Q3 2022. Consumer sentiment continued to be bleak, leading to OEMs and distributors cutting market spending. On the other hand, high inventory levels forced market participants to adopt destocking measures, hurting profit margins. Despite this, the 20% YoY drop probably exaggerated the gloominess in the market, as Q3 2021 was an especially successful period for the region.”

Within the MEA region, the Middle East fared better due to the GCC countries’ resilience. High inflows of energy revenues buttressed state coffers, which strengthened local currencies and kept inflation down. The region was also boosted by sales events associated with the World Cup, which is being held in Qatar since November. On the other hand, roughly 8 in 10 countries in Africa saw inflation accelerating in Q3, according to Counterpoint estimates. Persistent energy supply issues, as well as worries about another round of food shortages, kept consumers ever more cautious. We believe there is further room for inflation rates to rise in Africa towards the end of the year.

MEA Smartphone Unit Shipments Share, Q3 2022 vs Q3 2021

Source: Counterpoint Research Market Monitor, Q3 2022
Notes: Xiaomi includes POCO and Redmi; OPPO includes OnePlus; Figures may not add up to 100% due to rounding.

In terms of the MEA smartphone market’s competitive landscape, the biggest takeaway from the quarter was that while the economic downturn hurt most players, smaller brands disproportionately suffered more, as seen from the dramatic loss of market share. During this period of rising costs and worsening market sentiment, smaller brands faced mounting supply challenges. Maintaining cost discipline meant slashing spending elsewhere, such as marketing and distribution, and smaller players were unable to keep up with the bigger OEMs.

Market leader Samsung saw YoY volume and market share growth, as its supply issues subsided, while the Galaxy A series’ 2022 iterations continued to gain momentum. Samsung continues to be the best-placed OEM in the region as its broad product portfolio covers every customer segment. The brand is well-positioned to capture market volume when the economic issues ease.

Transsion Group brands continued to take the MEA region’s biggest share of smartphone shipments. However, its exposure to the lower-value segments, particularly in Sub-Saharan Africa, meant that it faced the strongest headwinds among the big brands. We noted aggressive destocking efforts during the quarter, mostly concentrated within the lower-end TECNO and itel brands. On the other hand, Infinix continued to perform well as its 2022 models ticked all the boxes. We believe Transsion may stage a rebound towards the end of the year, as the company prepares for higher-end launches for the TECNO and Infinix brands.

Xiaomi captured the third spot among OEMs, as supply issues disappeared in the rear-view mirror. The company’s affordable mid-range products, particularly the Redmi Note 11 and Redmi 10 series, remained popular among price-conscious customers, while its business received a boost due to favorable conditions in the Middle East region.

Apple continued to gain market share in the region, largely due to improving distribution across the region. The iPhone 13 series appeared regularly among the best-selling models in the region, even during the last months of the iPhone 13 cycle. We expect Apple’s volume and market share to increase further in the next quarter as the iPhone 14 sales begin to gain momentum.

While the end-of-year shopping season is expected to deliver a boost to the smartphone market, sales increases are unlikely to match the levels seen last year, as affordability will continue to be first and foremost among customers’ concerns. Macroeconomic headwinds and geopolitical uncertainties may well persist into 2023, but we do expect a small rebound in the MEA smartphone market next year. Economies in MEA have fared better than those in developed countries, and the second half of 2023 may see a release of pent-up demand, just as post-COVID-19 reopening spurred a period of consumer optimism.

Counterpoint Research’s market-leading Market Monitor, Market Pulse and Model Sales services for mobile handsets are available for subscribing clients.

Feel free to contact us at press@counterpointresearch.com for questions regarding our in-depth research and insights.

You can also visit our Data Section (updated quarterly) to view the smartphone market share for World, USA, China and India.

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About 50% of India Smartphone Users Planning to Buy New Device Within a Year as 5G Transition Gathers Pace: Survey

Samsung, Apple and OnePlus are the most preferred smartphone brands for the next purchase.
INR 20,000-INR 30,000 is the most preferred price band for their future smartphone purchases.
5G capability is the third most important factor in deciding future smartphone purchases.

London, San Diego, Buenos Aires, New Delhi, Hong Kong, Beijing, Seoul – October 21, 2022

About half of India’s smartphone owners plan to purchase their next smartphone within a year, according to Counterpoint Research’s annual consumer smartphone study in India. Further, India’s smartphone market ASP (average selling price) is expected to rise because consumers tend to prefer a higher price band for every subsequent purchase. Also, Samsung, Apple and OnePlus are at the top as the survey respondents’ preferred smartphone brands for the next purchase. In terms of features, 5G capability is the third most important feature considered when planning the next purchase. The same factor is ranked tenth in terms of importance for current smartphone purchases.

The objective of the study was to understand the changing consumer trends and choices across past holding, current ownership and future preference for smartphones. Based on the respondents’ previous smartphone ownership, the INR 10,000-INR 15,000 price band was the sweet spot. For the current smartphone ownership, the sweet spot shifted up to the INR 15,000-INR 20,000 band. And for the respondents’ future smartphone purchases, the price band shifted further up to INR 20,000-INR 30,000.

Research Analyst Arushi Chawla said, “Smartphones are now an important part of our lives. As a result, smartphone users try to upgrade their devices with every next purchase. When purchasing a new smartphone, more than one-third of the users plan to retain their current device as an alternative/secondary phone. Also, with more exchange offers available, more than one-fourth of the respondents plan to trade in their current smartphone when purchasing the next one. Therefore, users feel comfortable buying a smartphone from a higher price band for a better experience and updated features.”

Rising Popularity of INR 20,000-INR 30,000 Price Band

Source: India Smartphone Yearly Consumer Study, 2022

Looking at the brand preference for the next smartphone purchase:

Samsung, Apple and OnePlus are the respondents’ most preferred brands.
Samsung users have the strongest brand loyalty with 51% of the users who used Samsung as their previous device also using Samsung currently. Further, 43% of the current Samsung users prefer the brand for their next smartphone purchase.
Apple, despite having a smaller share in previous and current smartphone purchases, is the second most preferred brand (20%) for future purchases.

Top Smartphones for Current Usage and Future Purchase

Source: India Smartphone Yearly Consumer Study, 2022

Chawla added, “Samsung has a strong grip over the Indian smartphone installed base. It has a widespread distribution network and launches new models around the year across most price brands. All these factors have helped Samsung develop and maintain its brand value. Therefore, in the survey, Samsung maintained its top position both in terms of past ownership and current ownership and also for future preference. Samsung is followed by Apple and OnePlus as the most preferred future preference smartphone brands. The top reasons for preferring a brand are reputation, advanced features and user interface. As a result of these factors and the aspiration to move to a higher price band when purchasing a smartphone, users tend to prefer premium smartphone brands. In addition, 5G capability becomes more important as we move up the ladder for budget preference for future smartphones. 5G is one of the main factors taken into consideration for all major smartphone brands. But 5G is the most important factor for respondents preferring Apple as their next smartphone purchase.”

Methodology

The study was conducted in India using an online survey panel of a heterogeneous group of smartphone users. Responses from 1,075 users were collected using the quota sampling methodology for a better representation of the universe as per the current smartphone brand share in the market. We expect the results to have a statistical precision of +/- 4%.

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Analyst Contacts

Tarun Pathak

Arushi Chawla

Counterpoint Research

5G mmWave: Ecosystem & Economics Already Attractive (Part 3)

Every cellular generation transition has led to significant personal and economic transformation, unlocking new use-cases, applications, and benefits. The 4G network architecture and spectrum (600MHz to 2500 MHz) evolution were a step change in how mobile users communicate (video calls, instant messengers, consuming richer content (buffer-free OTT video, music) to commerce (O2O revolution from 15 mins groceries to hailing a cab) and more.

However, 5G network architecture along with more spectrum (sub-6GHz and especially mmWave 24GHz-100Ghz bands) is further elevating mobile experiences and performance with substantial network capacity, Gigabit throughput speeds, as well as lower latency to enable the tactile internet. 5G mmWave is key to deliver the “true 5G” promise. Tracking how the 5G mmWave ecosystem is progressing from components, devices and the network perspective has become imperative for stakeholders to strategize and deliver the “true 5G” benefits. The following are trends in 5G mmWave progress globally:

1. Adoption of 5G mmWave Gaining Momentum.

The USA has been spearheading mmWave 5G deployments globally, with Australia, Japan picking up along with key operators across 40+ countries which now have access to 5G mmWave spectrum and are either in the pre-commercialization or commercialization stages. These includes key mobile markets such as India, Korea, Taiwan, China, Italy, and others which will see active 5G mmWave deployments over the next couple of years to complement the sub-6GHz deployments focusing on 5G coverage with the capacity, throughput, and low latency 5G mmWave spectrum offers.

The overall economics of the 5G mmWave deployments offer solid business case for mobile operators to invest in the spectrum and network deployment.

See here:

The leading smartphone manufacturers have been shipping 5G mmWave phones for the last three years. For example, three in four 5G smartphones selling in USA support 5G mmWave spectrum bands and capabilities. We estimate that cumulatively more than a billion 5G mmWave smartphones will ship over the next five years globally as the 5G mmWave coverage densifies.

2. Little correlation between smartphone pricing and the presence/absence of 5G mmWave

The cost delta for 5G mmWave+Sub-6GHz and 5G sub-6GHz-only phones has narrowed significantly. Initially there was a substantial cost premium to equip a smartphone with mmWave capability. This has now come down to a $10-$20 BoM cost premium and will likely decline further. But for phones in the price bands above $300, the cost delta has become relatively insignificant thanks to the way OEMs are structuring their product portfolios and margins to play with. We therefore expect that 5G mmWave will become a de-facto feature for premium to mainstream 5G smartphones in the next few years. The next phase will be the increasing use of 5G mmWave in even low-end devices. 5G mmWave deployments will likely become ubiquitous towards the end of the decade, just before the launch of 6G networks.

Component vendors such as Qualcomm and OEMs such as Apple, Samsung, Moto, Sharp, Fujitsu and OnePlus have been at the forefront of adding 5G mmWave capabilities to smartphones to support carriers’ 5G deployments. Now, when we look across global pricing, we see little differential between mmWave and non-mmWave devices. For example: Apple’s iPhone 13 128 GB launched in the USA as a 5G mmWave+sub-6GHz version and it is cheaper than the 5G sub-6Ghz-only version selling in other markets globally. We have seen this trend with Samsung and Google where there is little difference between the two versions and, if anything, the sub-6GHz-only version is more costly. Some of this is to do with commercial decisions and some to do with foreign exchange, but the net result is that there is little correlation between smartphone prices and the presence of or absence of 5G mmWave capability.

So, price differentiation between sub-6GHz-only devices and those that also support mmWave has become a non-issue. This is in part because relatively few countries have deployed mmWave, so models featuring mmWave have not competed side-by-side with non-mmWave devices. And furthermore, OEMs are smartly managing their portfolios on a global basis to neutralize cost differences with growing volume scale as seen in the below chart. The higher scale also allows OEMs to price the 5G mmWave SKUs without charging a significant premium.

5G mmWave thus is also going to be a “differentiating feature” for OEMs. OEMs will start adding 5G mmWave support in their smartphones in the markets where 5G mmWave network is going to roll out in the near future to position the smartphone model as “future proof” and be ready to deliver “true 5G” with good coverage. This is going to be like the current trend we are seeing among OEMs in markets (e.g., India, SEA, Europe) where 5G has not yet rolled out in the network, but almost all $300+ phones support 5G capabilities with more than 10 5G bands, marketed as “globally future proof”. This approach is likely to be extended to mmWave devices.

3. 5G mmWave Smartphones Awareness & Preference Growing

Trying to understand the consumers’ attitudes and preferences towards 5G mmWave phones, we ran a survey in the USA where consumers are not hesitant to opt or switch to a 5G mmWave phone and data plan. Key findings below:

Sixty percent of the users checked while purchasing their 5G smartphone if it had 5G mmWave capabilities, which highlights the growing awareness of the technology.
For those users that were using a 5G mmWave smartphone (17% of total), the number one reason for their purchase was to subscribe to the high-speed 5G mmWave plan.
The above reasons for purchasing 5G mmWave smartphone also portray that the existing 5G mmWave users did not think about the price of the 5G mmWave smartphone while buying but the high-speed plan or just bought the phone which was a default option for the chosen plan were key.
Further, the top two reasons for almost half or more of the users who bought 5G mmWave plan were that they either already owned a supporting 5G mmWave smartphone or best suited their heavy usage which also exemplifies the pricing of the device is not one of the reasons or barriers.
The top three reasons for consumers who have not bought a 5G mmWave plan yet are: They are happy with their current 5G network based on their current data usage; their carrier is not offering the 5G mmWave service or their current handset is not compatible.
However, 43% of the users plan to subscribe to 5G mmWave service next as they start seeing more of the “true 5G” benefits.

Key Takeaways:

5G mmWave is going to be the key for OEMs, carriers to deliver the “true 5G” promise from speeds, latency, and capacity perspectives.
The cost differential between a mmWave+sub-6GHz and sub-6GHz only 5G smartphones is narrowing with growing scale, allowing OEMs to offset any extra costs through smart portfolio management.
In many cases, 5G mmWave smartphone models are priced more cheaply than the sub-6GHz only version in other geographies
This means there is no correlation between the 5G handset pricing if it is a 5G mmWave or a sub-6GHz-only smartphone.
An increasing percentage of consumers are beginning to actively opt for 5G mmWave smartphones to enjoy the “true 5G” benefits and device or plan costs is not a barrier
The percentage of consumers who are using 4G or 5G sub-6GHz-only plans but prefer to upgrade to a 5G mmWave service and smartphone is encouraging.
Its up to the device OEMs and carriers to adopt 5G mmWave capability and coverage respectively as a differentiator and put their best foot forward in offering users the “true 5G” experience to deliver and capture maximum value.
This will also help avoid any cognitive dissonance among users if the offering is not “true 5G” or “future proof” which could lead to churn.

Vietnam Soars in Global Supply Chains on Favourable Conditions

Vietnamese electronics manufacturing services (EMS) market will grow at a CAGR of 5% between 2020 and 2026. According to Vietnam’s General Statistics Office, the country’s consumer electronics sector recorded its highest ever production at 369.6 million units in October 2020, followed by the electronic components sector at 325.7 million units.

Given the exponential growth in its manufacturing sector along with growing domestic demand and exports, primarily in electronics and automobiles, the EMS business is projected to scale new heights in the country. Many global OEMs and EMS providers like Samsung, LG and Foxconn (Apple’s contract manufacturer) are investing in the production of printed circuit boards, camera modules, printers, servers, phones, networking equipment, televisions and other electronics equipment in the country.

Samsung, which in 2020 held almost 70% of the handset market share in Vietnam, is also one of the largest FDI players in the country. Vietnam has one of Samsung’s largest smartphone production bases outside South Korea. By 2022, Samsung is also projected to complete its $220-million research and development centre in Vietnam.

Investment climate in Vietnam

Despite the setback caused by COVID-19, Vietnam is one of the few countries in Asia that managed to record a positive GDP growth in 2020.

The constant improvement in investment and business policies, participation in bilateral and multilateral free trade agreements, increased FDI and geographical proximity to China have all been active factors in making Vietnam a favourable destination for manufacturers.

Pegatron has pegged almost $1 billion worth of investment in its Vietnamese plant that will be rolled out in three phases, targeting investments in computing, communication and consumer electronics facilities, by 2027.

Foxconn is also moving some parts of its iPad and MacBook assemblies to Vietnam from China against the backdrop of rising US-China tensions, thus seeking to derisk its production. It has also been awarded a licence to build a $270-million plant to produce laptops and tablets in Vietnam.

Google too is moving production of its smartphone brand Pixel for the US market to Vietnam. It is also likely that the company may end up moving its hardware production to Vietnam. Similar plans are underway at companies like Samsung, itel and Microsoft.

Xiaomi too is aiming to take advantage of cheap labour and other favourable market conditions in Vietnam. Most recently, the company opened its first phone assembly factory in Vietnam.

Successful absorption from China

Like China, Vietnam is known for its comprehensive and mostly five- to ten-year strategies, like ‘Made in Vietnam 2025: Industrial Policy and Strategy 2025’ and Vision for 2035. These policies have not only helped in changing Vietnam’s growth story which started 30 years ago but have also facilitated absorption of industry from China, including the shifts triggered by trade wars.

Its unprecedented pursuit for business-friendly policies, liberalisation of its economy, low wages, favourable demographics and successful pushing of its infrastructural capacities are all catalysts in making Vietnam a suitable ‘China Plus One’ destination in the global supply chain. As economies around the world look to derisk the heavily integrated supply chain ecosystem in the post-COVID-19 era, along with a heated US-China trade war, foreign investors like Google, Microsoft and Samsung feel better diversifying their risks.

Government strategy for future development

The Vietnamese government aims to have over 10 strategic locations in the IT segment by 2025 with revenues of more than $1 billion. Under its IT and Made in Vietnam programs, it aims to have over 100,000 tech firms to make Vietnam among top 30 countries in IT development in the coming years.

Vietnam’s growing capacity under the ‘China Plus One’ policy reflects the following trends:

With its 2025 vison, Vietnam aims to target fields with high value-addition and export potential.
The electronic equipment and automobile sectors, along with other industries like textile, seem to be gaining a lot of traction.
Vietnam wants to develop its supporting industries, especially mechanical goods, chemicals and telecommunications, to significantly leverage its position in the global supply chain.
The aim is to develop priority industries in key economic zones and coastal zones along with processing industries and supporting industries.
Vietnam is also aiming to get FDI from companies that could transfer technology and capacity to local industries and talent.

Conclusion

With Vietnam’s recent ascension to the ranks of the global supply chain hubs, it is easy to overlook the fact that Vietnam is still expanding and growing its infrastructure. With more companies moving their operations to Vietnam, the leasing demand in Vietnam’s industrial zones is soaring.

However, Vietnam’s growing competitiveness, market reforms, and steady progress in ease of doing business (evident in its higher scores in the World Economic Forum’s competitiveness index) are making it rise above the rest.

In an era of protectionism where the jitters of COVID-19 are still being felt by many economies, Vietnam is soaring to become one of the prime locations for export manufacturers. With its continuous and proactive efforts for open border partnerships (the country is part of over a dozen free trade agreements), Vietnam is a country that could possibly change the course of the tech era that lies ahead.

Apple’s October – November iPhone Sales Signal Record Quarter and 2021

Seoul, Hong Kong, New Delhi, Beijing, London, Buenos Aires, San Diego

December 23, 2020

Apple is likely to break previous iPhone sales records during its FY first quarter, according to Counterpoint Research’s Global Monthly Sell-Through Tracker, setting up the company for what could be the biggest year ever for the iPhone.

Although Oct-Nov 2020 global sell-through was down YoY, it declined by only low single digits. That is positive considering the four to six-week launch delay of the iPhone 12 versus the iPhone 11. There is now the possibility of a December sales surge, driven by the new iPhone 12, which would bring the quarter’s sell-through number into record territory.

Source: Counterpoint Research, Weekly Sales Tracker, USA

The popularity of the new model is evident when comparing iPhone 12 and iPhone 11 post-launch sales in the US market on a YoY, week-for-week basis.

Jeff Fieldhack, Counterpoint Research’s Director of US Mobile Devices and Carrier Strategies, commented, “The iPhone 12 consistently outperformed its predecessor during the first six weeks from launch – with the exception of week two, when strong early demand and ample supply delivered an exceptional sales week for the iPhone 11.”

He also noted, “Double and triple-digit weekly sales increases for the iPhone 12 over the iPhone 11 – despite 12 Pro and 12 Pro Max shortages – is sending a strong signal, and we believe the iPhone 12 will bolster global quarterly shipment growth for all iPhones to 21% YoY.”

US out-performance bodes well globally, and Counterpoint Research expects record iPhone shipments for the quarter to be driven not only by North America, but also China, Japan, India and Europe.

“What we’re seeing is a combination of things driving iPhone growth globally,” stated Peter Richardson, Global Head of Research. “These include pent up demand for a new 5G iPhone with both operators and consumers hungry for the new iPhone products, attractive prices on the iPhone 12 aided by bountiful promotional offers. iPhone SE sales also helped momentum together with iPhone 11 longevity, and solid Singles Day, Black Friday and Cyber Monday performance.”

Acknowledging that Apple faces issues, especially around supply, Mr. Richardson stated the company “is well positioned to mitigate the risks. The iPhone Pro and Pro Max are on backorder in the US, but lead times have dropped significantly over the past three weeks. Power management ICs remain constrained, but Apple is likely a favored customer going to the head of the line. The India Wistron controversy is not material and Apple is managing the situation. And in terms of their output capability globally, it is better than last year on increased hiring, overtime incentives and factories running more hours.”

Background:

Counterpoint Technology Market Research is a global research firm specializing in Technology products in the TMT industry. It services major technology firms and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of 13 years in the high-tech industry.

Analyst Contacts:

Jeff Fieldhack

Charles Moon

Counterpoint Research

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