Saturday, January 16, 2021

The US ‘Apple’ Turns Sour As China’s Xiaomi Heads For Global Domination In Smartphone Markets

Xiaomi replaced Apple for the first time to reach the third spot globally, after Samsung and Huawei, in the list of the biggest smartphone brands in the third quarter of  2020, research company Counterpoint’s quarterly report said. It ranks brands based on their global market share.

How Unknown Chinese Company Xiaomi Trumped Samsung To Lead India’s Smartphone Market

The Chinese smartphone maker has logged a record revenue of 72.2 billion yuan in the July-September quarter. Following improved shipment and global market figures, Xiaomi, which has been the world’s fourth-largest smartphone maker since 2018, has been ramping up its factory orders for next year.

According to a Nikkei Asia report, Xiaomi has been talking to suppliers to book components and parts for up to 240 million smartphones, which is more than the average annual level of iPhone shipments. Apple ships on average around 200 million iPhones a year.

At 240 million, Xiaomi’s shipments would be equivalent to Huawei’s peak shipments of 240.6 million units of smartphones in 2019 – the highest-ever for a Chinese smartphone maker, according to International Data Corporation.

History of the Apple logo - YouTube

With its bold expansion plans, Xiaomi on Wednesday raised nearly $4 billion, including $3.06 billion in Hong Kong’s largest-ever top-up share placement. The remaining $855 million from a convertible bond offering, that was heavily oversubscribed.

Global Shortage Of Components 

Some suppliers have said that the company is aiming for shipment of 300 million smartphones next year. Such high targets have become problematic for key providers like Qualcomm and MediaTek, as they are unable to commit to such volumes for a single company at a time when the whole tech supply chain faces component shortages, the report said.

They provide mobile processor chips to Oppo, Vivo, and Samsung as well. The sources have said that Xiaomi is setting a much more aggressive goal for suppliers as it hopes to expand the market before other rivals catch up.

It is also hoping to book and secure more parts to avoid any disruption from the current supply chain bottleneck and component shortage. The technology industry is also suffering a wide range of component shortages due to the surge in demand for devices for remote working, learning, and entertainment.

Last month, Xiaomi president Wang Xiang had acknowledged that the component shortage has affected the company’s planning. As per the industry sources, it is unclear when supply constraints across the board will ease.

Huawei Reels Under US Sanctions

The US has raised security concerns regarding Huawei’s 5G technology, resulting in Washington banning the company from accessing any semiconductors, components, or parts made using American technology.

The company’s global market share has shrunk from 18.6% to 14.7%, and shipments 22% year on year in the July-September quarter, as per IDC. Huawei had tried to secure as many components and parts as possible before the US ban, eventually unbalancing the industry’s supply.

South Korean tech giant Samsung remains on top in the global smartphone market with 47% quarter-on-quarter and 2% year-on-year. As per Counterpoint, the company shipped 79.8 million phones during the third quarter and held a 22% market share. In 2019, the company had shipped 295.1 million smartphones.

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