Roaring iPhone drives Apple in flagging Q3 smartphone market

With the arrival of the iPhone 13 to join the similarly 5G-capable iPhone 12 in the quarter, Apple has reported a record September quarter, but success was not universally shared within the overall global smartphone market, where the shortage in supply of semiconductor-related components is beginning to bite.

Apple reported that for the three months ended 25 September 2021, its flagship device line racked up $38.868bn in revenue, rising 47% year on year. For the last 12 months, the iPhone line generated $191.973bn, an increase of 39% compared with the end of the previous financial year.

However, research firm Omdia found that the global smartphone market contracted by 11.1% year on year to 317.7 million units in the third quarter of 2021, compared with 357.4 million units shipped in the same quarter in 2020. The analyst found that ongoing supply chain issues were halting the momentum of the smartphone market, which had been growing year on year over the last 12 months. It said Covid-19 continues to impact smartphone makers and consumers around the world, also affecting the market.

“After four quarters of year-on-year growth, the smartphone market lost steam in Q3 21,” said Gerrit Schneemann, principal analyst at Omdia. “Even Apple’s on-time delivery of its latest iPhone generation could not prevent the market from shipping 11% fewer handsets compared with Q3 20. The interwoven impacts of the global pandemic and supply chain pressures force smartphone OEMs to manage their inventory diligently.”

Looking at individual suppliers, Omdia calculated that Samsung took top spot, shipping 69.2 million units in the quarter, down 14.8% year on year, even though the company saw shipments rise 20.9% quarter on quarter. The analyst also noted that Samsung experienced setbacks in smartphone production in the second quarter due to the spread of the Covid-19 Delta variant in India and Vietnam, where major production bases are located.

Apple’s strong quarter saw it take second spot in the global smartphone stakes from Xiaomi, which saw its shipments grow by 17.6% quarter on quarter and by 22.7% year on year. Apple shipped 50.9 million units in Q3 21, up from 41.5 million units in Q3 20, and Omdia said it benefited from its ability to launch its latest iPhones in the now traditional September timeframe instead of delaying availability of the new devices until the fourth quarter, as it was forced to do last year.

Successful sales of the iPhone 12 series, which have continued since last year, are expected to continue with the iPhone 13 series, but Omdia cautioned that Apple’s iPhone 13 production target seems to have been lowered because of the recent shortage of components.

Xiaomi claimed third place in Q3 21, shipping 45.6 million units, up just 2.5% compared to Q3 20 and down 8.6% quarter on quarter. Oppo and Vivo sat in fourth and fifth places in Q3 21, respectively. Oppo shipped 33.2 million units, slightly more than the 32.6 million that Vivo shipped in Q3 21. Year on year, Oppo grew shipments by 18.6% and Vivo by 8.0% in the third quarter.

Honor jumped from 10th position in the second quarter to sixth in Q3, shipping 14.5 million units, up from 6.7 million in Q2 21. Omdia said Honor was regaining its position in the local China market and re-entering international markets, and it can ship handsets with Google Mobile Services pre-installed, giving Western users access to Google apps such as Gmail and Maps. Motorola increased shipments by 16.7% year on year, from 10.5 million units in Q3 20 to 12.3 million this year. Its shipments also grew quarter on quarter, by 16.0%.

Rounding out the top 10 was Huawei, which shipped 5.8 million units – 84.9% less than in Q3 20. Quarter on quarter, Huawei’s shipments declined by 40.8%, from 9.8 million units in 2Q 21. Omdia observed that even though shipments were declining and are now focused mostly on the Chinese market, Huawei has not yet given up on international markets, announcing the upcoming availability of new devices in markets beyond its home country.

“The shortage of semiconductor-related components supply since the beginning of the year is affecting set shipments in the second half of the year, rather than in the first half,” said Jusy Hong, senior research manager for wireless devices at Omdia. “In particular, shipments from third-tier OEMs, which have less economies of scale than first-tier companies, are decreasing significantly.”