On October 30, after the release of Apple’s financial report, market research institutions released Q3 global smartphone market rankings. They showed that in the past quarter, Xiaomi’s global shipments of smartphones grew rapidly, surpassing Apple and occupying the third place of the global smartphone market.
In fact, this is the first time in history that Apple’s smartphone shipment ranking has fallen outside the top three. However, in the view of Leifeng.com, the ranking performance of Xiaomi and Apple this time has the rationality of its internal factors and the contingency of its external factors.
Postponement of the new iPhone drags down Apple’s earnings
Apple released its fourth-quarter financial report as of September 30, 2020. The financial report shows that Apple’s Q4 revenue was 64.698 billion US dollars, an increase of only 1% from the 64.04 billion US dollars in the same period last year. The net profit was 12.673 billion US dollars. That was 8% lower than the 13.686 billion US dollars in the same period last year. Nevertheless, Apple’s Q4 revenue and net profit exceeded analyst expectations.
However, in this financial report, there are two shortcomings that are difficult to ignore. They are revenue from the iPhone and revenue from the Greater China region has both seen a relatively significant decline.
From a product perspective:
- iPhone revenue was $26.444 billion, compared with $33.362 billion in the same period last year;
- Mac revenue was US$9.032 billion, compared with US$6.991 billion in the same period last year;
- iPad’s revenue was US$6.797 billion, compared with US$4.656 billion in the same period last year;
- The revenue of wearable devices, household products and accessories were 7.876 billion US dollars, compared with 6.520 billion US dollars in the same period last year;
Overall, the net revenue of Apple’s hardware products was US$50.149 billion, down from US$51.529 billion in the same period last year. Among them, iPad, Mac and other hardware equipment revenues have all increased, especially Mac, which has a year-on-year increase of nearly 30%.
Only revenue from the iPhone has seen a significant decline, reaching nearly 7 billion U.S. dollars.
This is not difficult to understand. Last year’s Q4 financial report was driven by the sales of the new iPhone 11 series. But this year’s iPhone 12 series was delayed until October. It not only failed to contribute to the Q4 financial report but also suppressed users from buying old models. Because everyone is waiting for the new iPhone.
From a regional perspective, Apple’s revenue has risen to varying degrees in the Americas, Europe, Japan, and other regions in the Asia-Pacific region. But only in Greater China, Apple’s revenue has declined by as much as 28.5% Amplitude.
It is conceivable that the decline in revenue in Greater China and the decline in iPhone revenue have a considerable overlap.
Ranking changes of Xiaomi and Apple
However, the most striking thing is the ranking changes of Xiaomi and Apple. Xiaomi surpasses Apple to occupy third place in global smartphone shipments with a year-on-year growth of 42%. It is really a very good result. According to IDC data, Xiaomi shipped 46.5 million units in the third quarter.
Of course, Lei Jun is happiest with this achievement. At the Xiaomi Mi 9 Pro conference last year, Lei Jun said that Xiaomi is expected to return to the top three in the world. And now it has finally come true!
The reason why Xiaomi has achieved such an achievement is mainly due to the excellent performance of the Indian and Chinese markets. It accounted for 53% of the total sales of Xiaomi’s Q3. IDC said that in the Indian market, Xiaomi has recovered to the level of 85% before the epidemic. And Xiaomi’s entry-level model Redmi 9 series has performed well in the Indian and Chinese markets.
In addition, in the Chinese market, both Redmi K30 Ultra and Xiaomi Mi 10 Ultra have attracted the attention of consumers.
It is worth mentioning that in addition to the changes in the top four, the fifth place has also become Vivo. Its shipments increased by 8.9% year-on-year, mainly due to the 30% year-on-year growth rate of the Indian market.
Leifeng.com noticed that in addition to IDC, research institutions such as Canalys and Counterpoint have also published similar rankings. Together it reflects the current development trend of the global smartphone market.
For the global smartphone market, one of the most noteworthy factors is 5G.
For example, in the interpretation of Apple’s financial report, Tim Cook stated that no new iPhone products were launched in the last two weeks of September, resulting in unsatisfactory data. However, since the iPhone 12 series was released in October and China’s 5G development is very rapid, Apple is confident of achieving growth in China’s performance this quarter.
In addition to Tim Cook, the market research organization IDC is also very optimistic about the iPhone. It said that in this quarter, Apple will grow due to the strong market demand for the iPhone 12 series. Especially it will happen under the promotion of carrier contract plans.
In fact, we have every reason to believe that Apple’s iPhone shipments will be concentrated in this quarter under the influence of the iPhone 12 series. At the same time, Huawei’s smartphone business may continue to be affected under US sanctions.
Therefore, the global smartphone shipment ranking in the fourth quarter is very likely to undergo major changes again.