Overview:

• Demand recovers in June; Samsung’s supply hit by COVID-19 in Vietnam; sell-in continues to be lower than sell-through
  • Global smartphone sales rebounded in June, driven by a sharp post-pandemic recovery in India and the 618 shopping festival-triggered recovery in China. However, Southeast Asia was hit by a new COVID 19 wave, affecting both demand and supply. 
  • Samsung’s production was the worst hit in June due to the lockdown in Vietnam, creating a demand-supply mismatch and adding to the woes related to the already ongoing component shortages. This resulted in the smartphone sell-in being lower than the sell-through for June as well. Xiaomi, OPPO and vivo are likely to gain share from Samsung’s decline. 
  • The production in Vietnam is expected to return to normal in July.
• Samsung declines sharply; Xiaomi becomes #1 OEM globally; Apple achieves record second-quarter sales 
  • Samsung’s share declined in June across all regions. This was due to production disruptions in Vietnam because of the COVID-19 lockdown, which added to the ongoing component shortages. As a result, Samsung saw a demand-supply mismatch. It is also facing fierce competition from OPPO, vivo and Xiaomi across regions.
  • Helped by Samsung’s decline, the recovery of China market and continued expansion in the markets outside China, Xiaomi reached its highest ever sales in June, becoming the #1 OEM for the first time ever. It also became the #1 OEM in Eastern Europe in June. 
  • Driven by the strong momentum of the iPhone 12 series, Apple clocked record second-quarter sales in Q2 2021.
• Xiaomi tops $100-$199 and $200-$299 price bands at Samsung’s expense; Ultra-premium cooled down 
  • Impacted by the supply constraints, Samsung lost share across all price bands. Apple gained share in the premium segment, while Xiaomi gained share across all price bands at Samsung’s expense. Xiaomi became the top OEM in the $100-$199 and $200-$299 price bands. 
  • The ultra-premium segment cooled down in June as its share was reduced to single digits (8%). The S21 series was already impacted by the low yield of Samsung’s 5nm process node. The lockdown in Vietnam further added to the decline. Apple sales also declined outside the US and China due to seasonality.

Key Takeaways: