The global smartphone market wholesale average selling price (ASP) increased 10% YoY in Q2 2020 even as the shipments declined the highest ever at 23% YoY. Overall, the smartphone industry revenue declined 15% YoY during the quarter.

 Exhibit 1: Smartphone Wholesale ASP ($) by Regions*

* These ASPs are for Shipments

The ASPs for all the regions increased except Latin America. There are several reasons for this increase. While the COVID-19 pandemic had its effect on the overall smartphone market, the premium segment was much resilient, declining at a modest 8% YoY during the quarter as compared to the highest ever global smartphone market decline. The economic impact of the pandemic on the potential user base of the premium segment was less when compared with other customer segments. This is also indicated by the demand for Apple, the largest player in the premium segment. While shipments for most of the OEMs declined in Q2 2020, shipments for Apple increased 3% YoY and iPhone revenues increased 2% YoY.

There was also an increased dependency on mobile phones during the lockdown, with work from home, study at home, productivity applications, gaming, entertainment and other content consumption happening through mobile phones in varying degrees. This also propelled some consumers to upgrade their devices for a better overall user experience.

The uptick in 5G shipments also contributed to the growth of ASP. During the quarter, 5G contributed to 10% of the total global handset shipments but contributed to 20% of the total handset revenue since most of the 5G devices in Q2 2020 were in the premium segment. China was the largest contributor to 5G sales. 72% of the global 5G handset revenue came from China. Most of this was driven by the push from Huawei. Overall, the smartphone ASP in China increased 12% YoY and the region contributed to over 34% of the global smartphone revenue, highest since 2016. This was also because while all the other major economies were still suffering from the severe impact of COVID-19, China was already on the path to recovery.

On the flip side, the demand for lower price tier models was severely impacted. Entry-level devices are usually bought offline, and most of the global markets were in some stages of lockdown during Q2 2020. Consumer sentiment was also low, with users in the low-middle class avoiding discretionary purchases.

Overall, the reduction in demand for lower price tier devices due to economic impact and offline retail closure, the resilience of the premium segment, and the uptick in 5G sales, especially in China, contributed to the rise of smartphone ASP during the quarter.

Exhibit 2: Global smartphone Shipments Revenue Share by OEMs

Within the OEMs, Apple led the global smartphone revenues, capturing one-third of the pie, followed by Huawei and Samsung. Notably, Apple also captured around 59% of the global smartphone industry profit in Q2 2020.

Huawei (including Honor), driven by the China market, reported its highest ever global revenue share at 20% in Q2 2020. This was the first time that Huawei surpassed Samsung both in terms of shipments as well as revenue. This was because of Huawei’s continued push in China, the first country to recover from COVID-19. But as markets outside China recover, it will be difficult for Huawei to maintain this lead in coming quarters.

The analysis is from Counterpoint's Market Monitor Service, tracking shipments for 140+ brands in 60+ countries.