Qualcomm led the market with 29 per cent market share, a drop of three percentage points compared to last year. Huawei shipments in China increased, leading to a decline in Qualcomm market share
The smartphone application processor (AP) market declined 26 per cent in the second quarter of 2020 as smartphone sales plummeted due to the COVID-19 pandemic and resulting restrictions. Qualcomm, as per a recent Counterpoint Research Report, led the market with 29 per cent market share, a drop of three percentage points compared to last year.
“While the overall smartphone market declined due to the ongoing pandemic, the decline in market share for Qualcomm was partly also due to Huawei, which increased the use of HiSilicon APs after US restrictions, and its growing share in China, the world’s largest smartphone market. Qualcomm’s share in Huawei (including HONOR) smartphones declined from 12 per cent in Q2 2019 to three per cent in Q2 2020,” noted Neil Shah, VP of Research at Counterpoint.
5G smartphone sales more than doubled
The report adds that it all is not bleak for the smartphone segment. For example, 5G smartphone sales more than doubled (+126 per cent) in Q2 2020 from just a quarter ago. This trend, as Shah informed, will try to offset the overall decline in the first half and fuel the growth back in 2021.
“This will also create significant opportunities for AP suppliers to increase the share of semiconductor content even if the overall market volumes remain lower this year. Furthermore, the restrictions on Huawei will drive the growth for Qualcomm, MediaTek and Unisoc,” Shah said.
Oppo, vivo, Realme and Xiaomi, as per the report, will be the key drivers for Qualcomm and MediaTek as they look to fill the big gap which Huawei might leave behind in near- to mid-term. This could be more beneficial for Qualcomm in the premium segment ($400+ wholesale), especially in China where Huawei dominates with over 40% market share, and in the mid- to high-tier segments in markets like Europe.
“In the mid and low segments, MediaTek with its affordable 4G and 5G solutions will gain popularity in markets such as China, Russia, and Middle East & Africa (MEA) as Realme and Xiaomi look to target Huawei’s market share. Unisoc with its cost-efficient 5G solutions will also be one of the drivers, due to the demand for affordable 5G smartphones in China and emerging markets. Having a sizable market in the Middle East & Africa, Unisoc will play a critical role in bringing in cheaper 5G devices in the region in the future,” noted Shobhit Srivastava, research analyst at Counterpoint Research.