Overview:

• Demand declines further in May, sell-in lower than sell-through; China inventory at highest level since COVID-19 outbreak
  • Global smartphone sales declined further in May. This was the worst month for India before the beginning of market recovery. Our early market checks suggest a positive outlook and we are expecting a sharp recovery in June.
  • China continued to remain slow, improving marginally month on month. The US and LATAM markets also improved marginally driven by promotions. The COVID-19 cases in the SEA are increasing, prompting lockdowns and a slowdown in the market.
  • Sell-in was lower than sell-through in May. China inventory was at its highest level since the COVID-19 outbreak. The demand-supply gap will soon hit its peak as OEMs are cutting down their aggressive production plans. Component shortages continue and are expected to persist through 2021. The lockdown in Malaysia, where several chip-packaging/testing providers have their units, could intensify the shortages. The Taiwan water crisis is also concerning. If there is no rainfall by August, it will worsen the ongoing semiconductor shortage.
• Xiaomi becomes #1 OEM in Russia; Apple headed for a record second quarter sales
  • Despite a decline in India and China, Xiaomi continued to hold its market share driven by the growth in MEA and SEA regions. Xiaomi surpassed Samsung to become the #1 brand in Russia for the first time, capturing over 30% of the market. The OEM also continued to gain share in AP Others*, surpassing vivo to become the #2 OEM for the first time.
  • Apple continued to hold its market share – its highest ever for the month of May. May is usually a lean period for Apple but despite that, sales grew 4% MoM in the US and 3% MoM in China. The iPhone 12 was the highest-selling model globally. It also surpassed the 12 Pro Max to become the #1 model in the US in May.
• Apple gains strength in $600 and above segment; Samsung regains top position in $300-$599 segment
  • The share of $600 and above price band declined in May but Apple’s share within the band increased driven by the solid performance of the iPhone 12 series in the US and China. In the US, over half of the total smartphone sales in May were in the $600 and above price band. Samsung lost share in the $600 and above band as sales for the S21 cooled down.
  • The $300-$599 price band gained further in May. Samsung, driven by the Galaxy A53, A72 and the S21 5G, surpassed Apple to become the top OEM in the price band. However, overall, the iPhone 11 was the best-selling device in the segment, followed by the SE 2020.

Key Takeaways: