Mobile Phone Industry Under Uncertainty: Supply Shortage Is Likely To Continue Until The End Of 2021, And 5G Switching Will Take Time

According to the statistics of many third-party organizations, the global mobile phone industry in 2020, both in terms of production and shipment data, is the largest decline since 2016.

In 2020, which was originally expected to be the year of recovery, however, after encountering the new crown pneumonia epidemic and global environmental uncertainty, many mobile phone brands have made rapid strategic adjustments during this period, facing new challenges such as rising prices of upstream components and shortage of complete machines.

The price increase of components has been continued in the beginning of 2021. This is because Huawei adjusted and caught the potential growth space by the industry. Many manufacturers are increasing orders intensively, hoping to seize the opportunity. The glory of being separated also calls out the slogan to be the first in the industry.

However, as chip manufacturers are actively preparing for 5g, the "lack of core" of 4G mobile phones may continue to be staged. In the global stage of 5g large-scale replacement, this may become a new variable.

"Black swan" sweeps supply shortage

After experiencing the industry peak in 2017, the global mobile phone industry has shifted from high growth stage to cyclical era in the following years. And 5g replacement tide is undoubtedly the key to the next growth period.

In the third quarter of 2019, the global mobile phone industry ushered in the first positive growth in two years, which was once regarded as a signal that 2020 is expected to enter a relatively positive development range driven by 5g demand.

No one would have expected that the outbreak of new crown pneumonia in early 2020 will rapidly sweep the world, bringing great pressure to the global mobile phone supply chain. In the early stage, the main impact of the epidemic is smooth sales, and in the late stage, it is the shortage of complete machines caused by the imbalance of supply rhythm. This has become the core reason for the sharp decline of the mobile phone industry in 2020.

In this process, mobile phone manufacturers mainly deal with the sudden change of the industry by exploring new online models such as private domain traffic and fully sinking channels. Mobile phone manufacturers stronger than online channels also benefit. This led to a rise in sales in the mobile phone market after the second half of the year.

Counterpoint analyst Tang Ding told the 21st century economic report that it is expected that countries around the world will carry out vaccination in 2021. If Xinguan epidemic situation can be controlled gradually after the first quarter and the global economy recovers slowly, the global smartphone shipment is expected to grow by more than 10% in 2021. But she also pointed out that "we expect the growth momentum of China market will be lower than that of the global market due to the delayed replacement cycle and insufficient supply of Huawei or glory products."

This means that there are still many variables under the global multi factor change. In view of the different deployment process of 5g infrastructure around the world, the wave of 5g large-scale aircraft replacement will not come.

"At this stage, we estimate that 5g mobile phones will account for about 40% of the global smartphone shipments in 2021, and 4G will account for about 60% of the world's smartphone shipments, and LTE will remain the mainstream," Tang added

Huang Yuxuan, the research manager of Cibang consulting, also believes that considering that the coverage rate of 5g base stations in the world may not be more than half by 2025, it still needs longer time to realize the new generation of full-scale high-speed transmission.

However, these adjustments have undoubtedly affected the deployment rhythm of the supply chain level. From the upstream, some manufacturers or regional markets have heard the sound of machine shortage.

Tang Ding told reporters that in fact, 4G chips are in short supply in the second half of 2020. "In the second half of last year, due to semiconductor capacity constraints and the priority to ship Huawei, a variety of upstream components were in short supply. The increase in demand of mobile phone manufacturers in the fourth quarter further exacerbated the imbalance between supply and demand of some parts. The progress of the increase in the production of different parts will be inconsistent, but it is expected that the overall improvement will not be alleviated until the second half of 2021. "

There are also obvious feelings within mobile phone companies. "At least in the first half of 2021, there will be a serious shortage of 4G chips." An insider in the mobile phone industry told the 21st century economic report that as the mainstream chip manufacturers are actively exploring the production and price reduction of 5g baseband chips, and under the influence of the epidemic situation, chip manufacturers are pessimistic about the scale of 4G mobile phones represented by overseas markets, so they are very cautious about the planning of 4G chips.

"As a result, mainstream chip manufacturers focus their new product development on 5g, and the chip capacity planning usually takes more than half a year, so 4G supply will not be able to keep up." As a result, the company will make IOT another core sales focus during this period, the person added.

As Tang Ding said, in the second half of 2020, mainstream manufacturers, including Xiaomi, oppo and vivo, will increase orders one after another. This is undoubtedly due to the pure marketization behavior of Huawei and glory brand in the short term.

Industry insiders generally believe that these adjustments mean that other brands can capture some opportunities for new shares, and this time window may be fleeting.

But whether we can really seize the opportunity remains to be observed, a little carelessness may be reduced to "inventory". Trendforce Jibang consulting pointed out that once the actual sales are not as expected or the development bottleneck of the brand itself is not solved, leading to the widening of the long-term and long-term inventory gap, etc., the brand factory may adjust the inventory of parts and components between the second quarter and the third quarter of 2021.

Explore opportunities for breakthrough

In 2020, Huawei once briefly rushed to the world's No.1 sales position, but the changes in the external environment undoubtedly affected its subsequent development rhythm. Splitting glory is a manifestation.

According to Tang Ding, it is expected that Huawei / glory smart phones will be in short supply in the first half of 2021, and Android manufacturers such as oppo, vivo and Xiaomi are expected to seize part of the global market share of Huawei / glory.

"However, the difficulty of taking over Huawei mainly lies in the rapid expansion of domestic offline distribution channels and overseas operators channels." She added that because Huawei has the most comprehensive channel coverage in domestic low-level cities and rural markets, and consumers in low-level cities are also the most recognized brands of Huawei / glory, it is difficult for other brands to quickly cover and occupy the vacancy of Huawei / glory products in a short period of time, and it is difficult to establish the reputation of Huawei as a "national brand" among consumers in a short period of time.

She further believes that the short-term vacancy of Huawei / glory also creates opportunities for smaller mobile phone brands such as ZTE, TCL, Meizu, Xiaojiao, and China Mobile. "Especially in the domestic low-end cities and rural markets, but these brands also have to compete with large-scale OVM. Opportunities exist. It depends on the layout and execution of each manufacturer. "

Canalys analyst Jia Mo has a similar view. He told reporters that based on theoretical prediction, if glory development is not hindered by external environment, and even GMS system can be used overseas, then Huawei will give more limited space for other brands. If not, the space will be considerable.

"At present, it is very important to pay attention to whether small and medium-sized brands such as ZTE, Yijia and realme have the opportunity to further gain market share in China in 2021. If they succeed in products, channels and markets, they will have great strategic opportunities at home. " He analyzed.

The attitude of mobile phone manufacturers in this year more or less shows the direction they hope to break through, of course, it is not all strongly related to Huawei's changes.

On January 4, oppo founder and CEO Chen Mingyong said in his new year's speech that oppo will further sprint into the high-end market this year.

"In particular, 2021 marks the 10th anniversary of our high-end flagship, the find series. The find X3, released in the first quarter, will become a "pioneering work" for oppo brand to break through, and also our "ideal work for ten years." According to Chen Mingyong, in the mobile phone brand highland of Western Europe and Japan, the shipment volume of oppo in 2020 will reach 3.4 times and 2.8 times of that in 2019, which is one of the performances that is making efforts.

Liu zuohu, the founder and CEO of Yijia, also said recently that Yijia will sprint to the first position in the domestic high-end market in the next time.

At the launch of realme V15 on January 7, Xu Qize, vice president of the company and President of China, pointed out that the strategy of "5g Popularization" will continue to be implemented this year. "In the new year, we will continue to be committed to the sinking of 5g price and the in-depth cooperation with operators' policies. Let 5g mobile phones reach more people. "

He further said that realme will enrich the product line at the same time. In addition to the Q series, V series and X series that have been released, the new series named race will be put on the market, and the aiot product category will be further enriched. "This year, we will make China the next 10 million level sales market of realme."

Earlier, Xu Qi pointed out to reporters of the 21st century economic report that although China's market competition is very fierce, there are still opportunities. One of the core is 5g.

"Because China is expected to usher in a large-scale change tide in 2021, realme observes the market feedback after the sinking of RMB 1000 5g, and sees that the market is growing slowly." At the same time, he pointed out that the Chinese market has not yet reached the situation where it can not be completely squeezed in. The key is to see the products.

"In the process of switching from 4G to 5g in 2020, we can see that 5g will be replaced very quickly at the price above 2000 yuan. We have discussed with channel partners that the wave of 5g switching in the Chinese market in 2021 will directly reach the level of 1000 yuan machines." He continued.