Overview:

• Demand grows marginally; component shortages intensifying
  • Demand grew slightly month on month in August. North America and India grew driven by back-to-school and Independence Day promotions, respectively. China also grew slightly but remains lower than last year, as demand continues to be sluggish. The SEA market declined because of the pandemic. However, the situation in countries like Indonesia is improving and demand is likely to rebound in the coming months.
  • Sell-in was lower than sell-through in August, as shortages for components including Application Processors (AP) is intensifying. The supply-demand mismatch is likely to increase in the coming months as demand recovers and inventory for OEMs is depleted. Component prices are also rising and some of these costs are being transferred to the end consumers.
• Samsung gains as Fold shows promise – Xiaomi declines; HONOR enters top 3 in China
  • Samsung sales grew 12% month on month as its supply situation improved. Initial demand for its foldables was also high, especially for Flip 3. Samsung’s sales in Korea grew 56% MoM as pre-orders for foldables started to be fulfilled in late August. Flip 3 is available for free after trade in in several carrier channels in the US as well. The trade-in deals will also help increase volumes in the secondary market.
  • Xiaomi lost share across markets including Europe, Southeast Asia, LATAM, MEA as Samsung regained sales.
  • HONOR’s sales recovered further in August. It was among the fastest growing players in China (18% MoM) and became the third largest smartphone brand in August driven by the HONOR 50 and the HONOR Play 20. However, sales in markets outside China continued to decline.
• Samsung gains in the ultra-premium segment driven by foldables
  • The ultra-premium segment continued to hold market share. Apple slowed in markets outside the US, and lost share in the segment. However, this was compensated by Samsung’s growth.
  • Samsung gained share within the premium segment driven by the Galaxy Z Flip 3 and the Galaxy Z Fold 3. The Flip 3 became the third highest selling model in the ultra-premium segment in August. The Samsung Galaxy Z Flip 3 outsold the Galaxy Z Fold 3 across all regions.

Key Takeaways: