2020 has been an atypical year. We are still trying to cope with the new normal that the ongoing pandemic has brought upon us. These changes have helped some companies increase their sales numbers, as laptops and PCs are essential for people to work or study from home. However, 2020 didn’t treat every company or every market the same. The smartphone market suffered a 6% YoY decline in sales during Q4 2020, which translates to severe losses for everyone except Apple and Samsung.
According to the latest data from Counterpoint, Apple and Samsung were the only OEMs to see positive growth during the last quarter of 2020. Cupertino managed to increase its sales thanks to record high iPhone 12 sales, while the Korean tech giant has to thank its Samsung Galaxy S20 FE for saving its quarterly sales.
Research Analyst Maurice Klaehne explains why the recently launched iPhone 12 helped Apple reach 14 percent YoY growth during Q4 2020, as he says that, “We did see two bright spots in the market. Apple had a very strong YoY growth period, even with a delayed and staggered iPhone 12 launch. Demand for new iPhones outpaced supply in many cases as carriers had good promotional offers for both switchers and upgraders, something that is not as frequent. AT&T’s upgrade offers allowed customers to trade in older devices for discounts of up to $799, effectively making the iPhone 12 a free device with a qualifying unlimited plan and trade-in. Initial wait times for the Pro models, especially the iPhone 12 Pro Max, spanned close to three weeks. Given this strong demand for new iPhones and supply shortages in Q4 2020, we expect sales to spill over into Q1 2021.”
Senior Analyst Hanish Bhatia gave his comments on Samsung’s sales and how the Galaxy S20 FE was the main reason for the chaebol’s success. He says that “Samsung had a strong quarter as well, mainly due to the success of the Samsung S20 FE 5G. The OEM even launched a 256GB variant in the quarter to meet further demand from customers looking to buy a sub-$1,000 device. Especially during this COVID-19 period, customers are looking to spend less money, but still want specifications of flagship devices. Trade-in offers become especially appealing when the monthly bill does not increase by more than $10-$15. Looking ahead to 2021, the launch of new Samsung Galaxy S21 addresses the pricing issue as each device is $200 less expensive than the S20 series. However, January and February tend to be a lull in the market, and with Apple’s current momentum, there will be less opportunities for Samsung to capitalize on.”
Now, we must only wait and see how 2021 unfolds. The Samsung Galaxy S21 series has recently launched. Its aggressive pricing, deals, and trade-in discounts may give it a fighting chance against the iPhone 12’s momentum, even though Samsung may not be expecting its latest flagship to sell as much as its predecessors.
Source Counterpoint Research