Signals are finally getting stronger for the global smartphone market. Chinese handset makers like Huawei, which had been locked out of the race by U.S. sanctions, are dialing back in.
Signals are finally getting stronger for the global smartphone market. Chinese handset makers like Huawei, which had been locked out of the race by U.S. sanctions, are dialing back in.
That adds up to a tricky outlook for Apple in China, its second-largest revenue region after North America. Huawei’s Chinese rival Xiaomi, which reported third-quarter results Monday, is also making a renewed push in the premium segment—Apple’s bread and butter.
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That adds up to a tricky outlook for Apple in China, its second-largest revenue region after North America. Huawei’s Chinese rival Xiaomi, which reported third-quarter results Monday, is also making a renewed push in the premium segment—Apple’s bread and butter.
Global smartphone shipments are at their lowest level in a decade after dropping 11% in 2022, according to industry tracker IDC. The market may yet notch another decline for 2023 as a whole—but things have begun looking up in recent months. Smartphone shipments fell only 0.1% year on year in the third quarter, according to IDC. Supply-chain backlogs, which have plagued the industry since the pandemic-era electronics boom ended in 2022, may finally be easing.
Smartphone shipments in China, which had been doing even worse than the global market, are also perking up. Sales grew 11% year-over-year in the first four weeks of October, according to Counterpoint Research. Huawei was the star: Its sales jumped more than 90% from a year earlier.
Huawei’s sales plummeted after the U.S. imposed sanctions restricting its access to advanced chips in 2019. But it seems to have leapfrogged those roadblocks with the surprise launch of the Mate 60 Pro, a smartphone with 5G capabilities, in August. Xiaomi has also done well of late, with sales growing 33% year-over-year in the same four-week period of October. Apple’s sales, meanwhile, were down by a single-digit percentage, according to Counterpoint.
Outside China, Huawei faces a tougher battle, since U.S. sanctions mean it still can’t use products like Google’s Android operating system. The recovery of the global smartphone market will still, however, benefit the likes of Xiaomi and Oppo—which were never targeted by Huawei-style U.S. sanctions. Xiaomi is a major player in markets like India. Around 80% of Xiaomi’s smartphone shipments are outside of China, data from IDC shows. The company’s revenue last quarter grew 1% from a year earlier, results released Monday showed.
Xiaomi’s shares have gained 46% this year, handily outperforming the Chinese and U.S. markets. The company has also been focusing on improving profit margins by pushing a more premium product mix. That’s a change from the company’s previous strategy of expanding scale at the expense of profitability. Xiaomi’s operating margin improved to 7.1% last quarter, from 6% a quarter earlier.
Nascent signs of bottoming in the global cellphone market are a great sign for all handset makers. But with Huawei back in the game and Xiaomi eyeing pricier phones, the battle for customers could unfold differently this cycle. Moreover, from an investor perspective, Xiaomi still looks relatively cheap: With shares half their 2021 peak, the company currently trades at about 23 times the next 12 months’ expected earnings, according to S&P Global Market Intelligence, against roughly 29 for Apple.
Particularly in China, Apple should be looking over its shoulder.
Write to Jacky Wong at jacky.wong@wsj.com
Signals are finally getting stronger for the global smartphone market. Chinese handset makers like Huawei, which had been locked out of the race by U.S. sanctions, are dialing back in.
Signals are finally getting stronger for the global smartphone market. Chinese handset makers like Huawei, which had been locked out of the race by U.S. sanctions, are dialing back in.
That adds up to a tricky outlook for Apple in China, its second-largest revenue region after North America. Huawei’s Chinese rival Xiaomi, which reported third-quarter results Monday, is also making a renewed push in the premium segment—Apple’s bread and butter.
Hi! You’re reading a premium article
That adds up to a tricky outlook for Apple in China, its second-largest revenue region after North America. Huawei’s Chinese rival Xiaomi, which reported third-quarter results Monday, is also making a renewed push in the premium segment—Apple’s bread and butter.
Global smartphone shipments are at their lowest level in a decade after dropping 11% in 2022, according to industry tracker IDC. The market may yet notch another decline for 2023 as a whole—but things have begun looking up in recent months. Smartphone shipments fell only 0.1% year on year in the third quarter, according to IDC. Supply-chain backlogs, which have plagued the industry since the pandemic-era electronics boom ended in 2022, may finally be easing.
Smartphone shipments in China, which had been doing even worse than the global market, are also perking up. Sales grew 11% year-over-year in the first four weeks of October, according to Counterpoint Research. Huawei was the star: Its sales jumped more than 90% from a year earlier.
Huawei’s sales plummeted after the U.S. imposed sanctions restricting its access to advanced chips in 2019. But it seems to have leapfrogged those roadblocks with the surprise launch of the Mate 60 Pro, a smartphone with 5G capabilities, in August. Xiaomi has also done well of late, with sales growing 33% year-over-year in the same four-week period of October. Apple’s sales, meanwhile, were down by a single-digit percentage, according to Counterpoint.
Outside China, Huawei faces a tougher battle, since U.S. sanctions mean it still can’t use products like Google’s Android operating system. The recovery of the global smartphone market will still, however, benefit the likes of Xiaomi and Oppo—which were never targeted by Huawei-style U.S. sanctions. Xiaomi is a major player in markets like India. Around 80% of Xiaomi’s smartphone shipments are outside of China, data from IDC shows. The company’s revenue last quarter grew 1% from a year earlier, results released Monday showed.
Xiaomi’s shares have gained 46% this year, handily outperforming the Chinese and U.S. markets. The company has also been focusing on improving profit margins by pushing a more premium product mix. That’s a change from the company’s previous strategy of expanding scale at the expense of profitability. Xiaomi’s operating margin improved to 7.1% last quarter, from 6% a quarter earlier.
Nascent signs of bottoming in the global cellphone market are a great sign for all handset makers. But with Huawei back in the game and Xiaomi eyeing pricier phones, the battle for customers could unfold differently this cycle. Moreover, from an investor perspective, Xiaomi still looks relatively cheap: With shares half their 2021 peak, the company currently trades at about 23 times the next 12 months’ expected earnings, according to S&P Global Market Intelligence, against roughly 29 for Apple.
Particularly in China, Apple should be looking over its shoulder.
Write to Jacky Wong at jacky.wong@wsj.com
Signals are finally getting stronger for the global smartphone market. Chinese handset makers like Huawei, which had been locked out of the race by U.S. sanctions, are dialing back in.
Signals are finally getting stronger for the global smartphone market. Chinese handset makers like Huawei, which had been locked out of the race by U.S. sanctions, are dialing back in.
That adds up to a tricky outlook for Apple in China, its second-largest revenue region after North America. Huawei’s Chinese rival Xiaomi, which reported third-quarter results Monday, is also making a renewed push in the premium segment—Apple’s bread and butter.
Hi! You’re reading a premium article
That adds up to a tricky outlook for Apple in China, its second-largest revenue region after North America. Huawei’s Chinese rival Xiaomi, which reported third-quarter results Monday, is also making a renewed push in the premium segment—Apple’s bread and butter.
Global smartphone shipments are at their lowest level in a decade after dropping 11% in 2022, according to industry tracker IDC. The market may yet notch another decline for 2023 as a whole—but things have begun looking up in recent months. Smartphone shipments fell only 0.1% year on year in the third quarter, according to IDC. Supply-chain backlogs, which have plagued the industry since the pandemic-era electronics boom ended in 2022, may finally be easing.
Smartphone shipments in China, which had been doing even worse than the global market, are also perking up. Sales grew 11% year-over-year in the first four weeks of October, according to Counterpoint Research. Huawei was the star: Its sales jumped more than 90% from a year earlier.
Huawei’s sales plummeted after the U.S. imposed sanctions restricting its access to advanced chips in 2019. But it seems to have leapfrogged those roadblocks with the surprise launch of the Mate 60 Pro, a smartphone with 5G capabilities, in August. Xiaomi has also done well of late, with sales growing 33% year-over-year in the same four-week period of October. Apple’s sales, meanwhile, were down by a single-digit percentage, according to Counterpoint.
Outside China, Huawei faces a tougher battle, since U.S. sanctions mean it still can’t use products like Google’s Android operating system. The recovery of the global smartphone market will still, however, benefit the likes of Xiaomi and Oppo—which were never targeted by Huawei-style U.S. sanctions. Xiaomi is a major player in markets like India. Around 80% of Xiaomi’s smartphone shipments are outside of China, data from IDC shows. The company’s revenue last quarter grew 1% from a year earlier, results released Monday showed.
Xiaomi’s shares have gained 46% this year, handily outperforming the Chinese and U.S. markets. The company has also been focusing on improving profit margins by pushing a more premium product mix. That’s a change from the company’s previous strategy of expanding scale at the expense of profitability. Xiaomi’s operating margin improved to 7.1% last quarter, from 6% a quarter earlier.
Nascent signs of bottoming in the global cellphone market are a great sign for all handset makers. But with Huawei back in the game and Xiaomi eyeing pricier phones, the battle for customers could unfold differently this cycle. Moreover, from an investor perspective, Xiaomi still looks relatively cheap: With shares half their 2021 peak, the company currently trades at about 23 times the next 12 months’ expected earnings, according to S&P Global Market Intelligence, against roughly 29 for Apple.
Particularly in China, Apple should be looking over its shoulder.
Write to Jacky Wong at jacky.wong@wsj.com
Signals are finally getting stronger for the global smartphone market. Chinese handset makers like Huawei, which had been locked out of the race by U.S. sanctions, are dialing back in.
Signals are finally getting stronger for the global smartphone market. Chinese handset makers like Huawei, which had been locked out of the race by U.S. sanctions, are dialing back in.
That adds up to a tricky outlook for Apple in China, its second-largest revenue region after North America. Huawei’s Chinese rival Xiaomi, which reported third-quarter results Monday, is also making a renewed push in the premium segment—Apple’s bread and butter.
Hi! You’re reading a premium article
That adds up to a tricky outlook for Apple in China, its second-largest revenue region after North America. Huawei’s Chinese rival Xiaomi, which reported third-quarter results Monday, is also making a renewed push in the premium segment—Apple’s bread and butter.
Global smartphone shipments are at their lowest level in a decade after dropping 11% in 2022, according to industry tracker IDC. The market may yet notch another decline for 2023 as a whole—but things have begun looking up in recent months. Smartphone shipments fell only 0.1% year on year in the third quarter, according to IDC. Supply-chain backlogs, which have plagued the industry since the pandemic-era electronics boom ended in 2022, may finally be easing.
Smartphone shipments in China, which had been doing even worse than the global market, are also perking up. Sales grew 11% year-over-year in the first four weeks of October, according to Counterpoint Research. Huawei was the star: Its sales jumped more than 90% from a year earlier.
Huawei’s sales plummeted after the U.S. imposed sanctions restricting its access to advanced chips in 2019. But it seems to have leapfrogged those roadblocks with the surprise launch of the Mate 60 Pro, a smartphone with 5G capabilities, in August. Xiaomi has also done well of late, with sales growing 33% year-over-year in the same four-week period of October. Apple’s sales, meanwhile, were down by a single-digit percentage, according to Counterpoint.
Outside China, Huawei faces a tougher battle, since U.S. sanctions mean it still can’t use products like Google’s Android operating system. The recovery of the global smartphone market will still, however, benefit the likes of Xiaomi and Oppo—which were never targeted by Huawei-style U.S. sanctions. Xiaomi is a major player in markets like India. Around 80% of Xiaomi’s smartphone shipments are outside of China, data from IDC shows. The company’s revenue last quarter grew 1% from a year earlier, results released Monday showed.
Xiaomi’s shares have gained 46% this year, handily outperforming the Chinese and U.S. markets. The company has also been focusing on improving profit margins by pushing a more premium product mix. That’s a change from the company’s previous strategy of expanding scale at the expense of profitability. Xiaomi’s operating margin improved to 7.1% last quarter, from 6% a quarter earlier.
Nascent signs of bottoming in the global cellphone market are a great sign for all handset makers. But with Huawei back in the game and Xiaomi eyeing pricier phones, the battle for customers could unfold differently this cycle. Moreover, from an investor perspective, Xiaomi still looks relatively cheap: With shares half their 2021 peak, the company currently trades at about 23 times the next 12 months’ expected earnings, according to S&P Global Market Intelligence, against roughly 29 for Apple.
Particularly in China, Apple should be looking over its shoulder.
Write to Jacky Wong at jacky.wong@wsj.com
