5G smartphones drive growth in sector despite chip shortage

Despite global supply constraints and a crippling shortage of chips, consumer demand for 5G smartphones has soared in anticipation of network rollouts soon. They contributed to an overall growth in smartphone shipments during the quarter ended September 2021, according to a new report by Cybermedia Research (CMR). 

5G smartphones accounted for 22% of the overall smartphones shipped during the September quarter, CMR's India Mobile Handset Market Review Report for Q3 2021, said. 5G phones also accounted for 40% of all new smartphones launched in the preceding quarter, the report noted.

“With smartphone brands, such as OnePlus, OPPO, Realme, Samsung, and Vivo prioritizing 5G, and consumers seeking to future-proof themselves, 5G continues to gain momentum. Together, these five brands shipped 5G smartphones over $ 3 billion during Q3 2021,” said Shipra Sinha, Analyst-Industry Intelligence Group, CMR.

Most 5G smartphones belonged to the ultra-premium category initially, according to the report. However, with growing consumer demand and the availability of low-cost 5G chipsets, many new devices are in the price range of Rs 20,000 to Rs 30,000. According to CMR, a total of 20 5G smartphones were launched during the September quarter. 

The Department of Telecom (DoT) had allocated trial spectrum for 5G to all major telcos, including Reliance Jio, Bharti Airtel, and Vodafone Idea, earlier this year. Bharti Airtel clocked speeds of 100mbps on a 5G-enabled mobile device during one of the trials in collaboration with Ericsson last month. The company has also demoed cloud gaming use-cases to be enabled by 5G networks.

Also read: Cloud gaming to be one of the biggest use cases of 5G: Airtel CTO

According to the CMR report, overall smartphone shipments in India for the September quarter grew 47% QoQ (quarter-on-quarter). The research firm expects the demand to remain strong for the remainder of the year, and predicted a 5-8% YoY (year-on-year) growth in shipments for the entire 2021 calendar year. 

“In Q4 2021 and beyond, the supply chain constraints will continue to persist. Smartphone brands that can augment their component supplies, and plan their market outreach strategies, will be able to succeed. CMR anticipates consumer sentiment to remain robust during this period, driven by India’s growing digital transformation,” Anand Priya Singh, Analyst- Industry Intelligence Group, CMR said in a statement. 

In terms of market share, Xiaomi (23%) remained at the top, followed by Samsung (18%), Vivo (15%), Realme (15%), and Oppo (9%). However, in terms of YoY growth, all five brands reported a dip in shipments, thanks to global supply constraints and shortage of chips. 

Samsung was most impacted of all with a 26% drop, followed by Vivo (-13%), Realme (-11%), and Xiaomi and Oppo (-9%). This indicates that despite sequential growth, the demand is not the same as it was last year when shipments grew exponentially as a result of the pending demand caused by lockdowns. 

Apple remained dominant in the Rs 50,000 to 1,00,000 segment with an 84% market share and 32% YoY growth, while OnePlus reported a 68% YoY growth in Rs 25,000 to 50,000 segment.