The smartphone market in China declined by 11% in Q4 2018 and by similar magnitude the whole year, according to numbers from the research firm Strategy Analytics.
Quarterly shipments of smartphones in China dropped from 121 million in Q4 2017 to 108 million in the last quarter of 2018. The annual volume in 2018 came down to 409 million from 460 million the previous year. The market registered a fifth consecutive quarter of contraction, largely due to longer replacement cycle and weak consumer spending, according to the quarterly update from the firm. In 2018, China’s economic growth came to the lowest annual rate since 1990, reported media recently.
No everyone suffered equally though. Huawei beat the competitors as well as the market by shipping 30 million smartphones in the quarter, capturing 28% of the market, giving it a clear market leadership position. “Huawei’s growth soared 23% annually and it is now the clear market leader. A strong product portfolio, famous brand and extensive retail channels were among the main success factors,” commented Neil Mawston, Executive Director at Strategy Analytics.
While Samsung, the global leader in smartphone market, has long underperformed in China and is nowhere to be seen on the leader board, Apple’s woes also continued. It is now occupying the number four position on the chart, with 10% market share. “iPhone shipments dropped 22% annually and this was the firm’s worst performance since early 2017. Apple iPhone has now fallen on a year-over-year basis in China for 8 of the past 12 quarters,” said Linda Sui, Director at Strategy Analytics. Similar to what we have seen in India, the majority of the Chinese consumers, faced with the abundant choices offered by the Android products, do not see enough value for money in the iPhone. “Apple is in danger of pricing the iPhone out of China,” Sui added.
The intense competition in China is driving some local brands to look elsewhere for new opportunities. Xiaomi, which just dropped below Apple in the latest quarter in the Chinese market, is eyeing Europe and Latin America for new growth. OnePlus is another Chinese brand trying to gain a foothold in the mature markets with strong specs at appealing price level. However they may find the consumers in these markets less receptive to new brands. For example, a recent research done by Tappable, a UK mobile app developer, suggests only 34% of consumers would consider purchasing from less known brands.
More details of Qualcomm’s first 5G chipset have been released, bringing all-round improvements, and a 5G chipset for PCs was also announced.
On the first day of its annual Snapdragon Technology Summit, Qualcomm announced its 5G chipset for mobile devices, the Snapdragon 855, but released limited specs. On the following two days more details were disclosed. An SoC for 5G-connected PCs, the Snapdragon 8cx was also unveiled.
In addition to the X50 modem for 5G connectivity (on both mmWave and sub-6GHz frequencies) and X24 modem (to provide LTE connectivity), at the centre of the Snapdragon 855 is ARM’s new flagship Cortex A76 CPU, marketed by Qualcomm as Kryo 485. It contains 8 cores with the single core top performance at 2.84 GHz. Qualcomm claims the 855 is 45% faster than its predecessor 845, though it did not specify what exactly this refers to. More importantly for Qualcomm, the top speed is 9% faster than the Kirin 980 from HiSilicon (a Huawei subsidiary), another 7-nanometre implementation of the ARM Cortex A76.
Also included in the 855 is the new Adreno 640 GPU rendering graphics. Qualcomm has focused 855’s marketing messages on gaming performance, and the GPU is at the core to deliver it. Qualcomm claims the new GPU will enable true HDR gaming, as well as support the HDR10+ and Dolby Vision formats. Together with the display IP, the Adreno 640 GPU will support 120fps gaming as well as smooth 8K 360-degree video playback. Another feature highlighted is the support for Physically Based Rendering in graphics, which will help improve VR and AR experience, including more accurate lighting physics and material interactions, for example more life-like surface texture, or material-on-material audio interaction.
The key new feature on Snapdragon’s Hexagon 690 DSP is that it now includes a dedicated Machine Learning (ML) inferencing engine in the new “tensor accelerator”. The Hexagon 690 also doubles the number of HVX vector pipelines over its predecessors the Hexagon 680 and 685, to include four 1024b vector pipelines. The doubled computing power and the dedicated ML engine combined are expected to improve the Snapdragon 855’s AI capability by a big margin.
The integrated new Spectra 380 image signalling processor (ISP) will both improve the Snapdragon’s capability to deepen acceleration and to save power consumption when processing images. Qualcomm believes the new ISP will only consume a quarter of the power as its predecessor for image object classification, object segmentation, depth sensing (at 60 FPS), augmented reality body tracking, and image stabilisation.
On the OEM collaboration side, in addition to Samsung, on day 2 of the event we also saw Pete Lau, the CEO of Chinese smartphone maker OnePlus come to the stage to endorse the new 5G chipset and vow to be the “first to feature” the Snapdragon 855. Separately, the British mobile operator EE announced that it will range a OnePlus 5G smartphone in the first half of 2019.
On the same day, thousands of miles away, more Chinese smartphone OEMs including Xiaomi, OPPO, Vivo, and ZTE (in addition to OnePlus) also embraced the new Snapdragon chipset at the China Mobile Global Partner Conference in Guangzhou, southern China. China Mobile will also launch a customer premise equipment (CPE), likely a fixed wireless access modem, using the same platform.
Back in Hawaii, on day 3 of the Snapdragon Tech Summit, Qualcomm launched a new chipset for PC: the Snapdragon 8cx (“c” for computer, “x” for eXtreme). This is Qualcomm’s third iteration of chipset for PC, built on ARM v8.1 (a variant of Cortex A76). Similar to the Snapdragon 855, the 8cx also has the X24 integrated cellular modem with for LTE connectivity, and the X50 modem with 5G connectivity can be paired with it. The CPU also has eight cores, with a top speed of 2.75 GHz. The new Adreno 680 GPU is said to process graphics twice as fast as the GPU in the previous generation ARM for Windows chipset (Snapdragon 850) but 60% more efficient in power consumption.
Perhaps the most meaningful change is its memory architecture. The Snapdragon 8cx will have a 128-bit wide interface, enabling it to provide native support for much more software and applications, including Windows 10 Enterprise and Office 365, which clearly is a sales pitch to the corporate IT departments.
Unlike the OEM support garnered by Snapdragon 855, there was no public endorsement by PC makers yet. Lenovo did come to the stage but was only talking about its Yoga 2-in-1 notebooks that have used earlier generations of Snapdragon chipsets for Windows on ARM. On the other hand, Qualcomm does not position Snapdragon 8cx as a replacement for the 850 but rather as a higher end contemporary, with 850 mainly targeted at a niche consumer market.
In general, this year’s Snapdragon Tech Summit has delivered more step change with the new product launches. More concrete industry support was also on show, indicating that, depending on how fast and extensive 5G is to be rolled out, we may start seeing true 5G smartphones in the first half of next year. We may need to wait a bit longer before a reasonable line-up of always-on 5G connected PCs can hit the market.
It looks like we may have hit the ceiling with respect to what people are prepared to pay for a flagship smartphone and cheaper alternatives are benefiting.
Counterpoint Research has released some interesting data tracking the global smartphone market by vendor and also by price tier and region. This kind of slicing and dicing of data can reveal some interesting trends and in this case it uncovers some significant movement in the price tiers immediately below premium.
Apple continues to kick ass at the very top, and it’s hard to see this ever changing given the unique differentiators it has in the form of software, brand, loyalty, etc. But with the start of the iPhone X era, Apple decided to test the market’s price tolerance by going over $1,000 for the basic version of a phone for the first time. It seems to have got away with it, but these new numbers indicate it’s also driving demand for cheaper devices that are almost as good.
You can see the chart below. Counterpoint says and smartphone costing $400 or more is in the premium segment, but then subdivides it by price tier. Above $800 Apple has a near monopoly and then it largely shares the $600-$800 tier with Samsung. Below that, however, is where the Chinese vendors come in, with OnePlus being especially interesting as it’s far less reliant on its domestic market than the likes of Oppo and Vivo. It is doing especially well in the UK and India, in the latter case becoming the leading premium smartphone vendor by volume for the first time in Q2 2018.
We spoke to Neil Shah of Counterpoint to get some insight into what’s going in in this price tier. “As smartphone users mature on the usage experience curve they are looking for premium specs and experience,” he said. “However, the bulk of them are not able to afford or invest more than $800+ for a phone as $800+ is the new normal for premium specs.
“Hence, there is a pent-up demand for ‘affordable flagship’ grade premium smartphones. Players like OnePlus has been able to offer the flagship grade specs at almost $500-$600 price points helping it significantly grow share. OnePlus has been expanding swiftly in Western European markets with growing popularity especially in Nordics, UK, Germany and so forth hitting that affordable premium price points.”
The other table served up by Counterpoint was a top-5 list of premium tier vendors by region. As you can see, OnePlus is among the leaders in Western Europe and APAC excluding China. Apple and Samsung top nearly all of the lists, but there’s a reassuring degree of diversity among the next three, with Motorola still doing OK in the Americas, Nokia-branded HMD appealing to the Middle East and Africa and even Asus getting some success in Eastern Europe.
OnePlus was so pleased with its achievement it even got some more granular data from Counterpoint to use in its own press release. Apparently OnePlus was the third best-selling premium smartphone in Sweden in Q2, fourth in the UK, France, Germany and the Netherlands, and fifth in Italy. That comes as no surprise to us as we found it to represent great value for money even when compared to other premium Android phones.
I’m thinking of getting a new smartphone so I asked for review samples of the Samsung Galaxy S9, Google Pixel 2 and OnePlus 6 to help me choose.
My current phone is the Samsung Galaxy S7, which I bought two years ago as part of a 24-month contract. That means I’m now eligible for a ‘free’ upgrade so long as I stay on the same contract. Alternatively the S7 still works just fine so I could just downgrade to a SIM-only tariff and save myself some money for a few months.
The obvious upgrade would be to move to the S9 so that’s the first one I had a look at. The most obvious difference from the S7 is that the ‘edge’ screen – i.e. one that wraps around the longer sides of the device – is now standard issue, while it was a premium upgrade two years ago.
You can see the difference in the photo below, which shows the S9 in the middle, my S7 on the right and the Pixel 2 XL on the left (the 1+6 hadn’t turned up before the S9 was reclaimed). You can also see that, while the overall size of the S9 is pretty much the same, they have shrunk the black bands at the top and bottom to reclaim some screen real estate.
And that’s well worth doing because the super AMOLED screen is one of the real strengths of this phone, it seems to have higher resolution and richer colours than the others, which makes looking at it a downright pleasure.
The other big change is that the whole chassis is made of a ceramic-like glass, which feels really premium and classy but also a tad fragile and pointless since I’d be whacking a case onto it as soon as I got it out of the box anyway. On that note the Spigen case I’ve had on my S7 as contemptuously shrugged off many drops over the past couple of years.
Other positives include a distinct upgrade in general performance over my phone, surprisingly good built-in speakers (The day is my enemy by The Prodigy and Hardwired by Metallica were my chosen test tracks, on the assumption that if they could handle them they could handle anything, see below), a top camera and a face unlock feature that worked very smoothly.
The major negatives all concerned the software Samsung has put on the phone as part of its endless quest to be more than just a Google vassal in the smartphone space. The big one is Bigby, Samsung’s take on the AI-driven personal assistant, but there’s the usual range of Samsung app it hopes we’ll use instead of Google or third party ones.
There’s nothing conspicuously wrong with any of these, it’s just that I find myself drawn towards the alternatives, often Google ones I’ve grown accustomed to. I have to admit I haven’t warmed to smart assistants in general and still feel a bit weird talking to a device without another human being involved in the exchange, but there was nothing about Bixby that made me want to revise that position.
Moving onto the Pixel, it should be noted straight away that Google sent me the XL version, so it has a bigger screen, battery etc and is more equivalent to the S9 plus, but other than size the features are largely the same. It has a metal back and sides that feel more robust than the glass S9 and you unlock it through a fingerprint reader on the back, which is handy because your index finger naturally heads that way when you hold it.
The screen seems every bit a sharp as that of the S9 but the colours seem slightly less vivid. The speakers are just as good and, quite frankly, it was hard to tell things like the camera, performance, etc apart – they are excellent on both. I preferred the stripped-down Android interface and the syncing with various Google services is spookily complete – it even sends me relevant sports news without me even requesting it.
It was hard to find fault with the Pixel 2 XL but equally difficult to find areas in which it was conspicuously superior to the S9, which is a general problem for dilettante smartphone reviewers like me, and which brings us on to the last device in this inexpert round-up.
The 1+6, as you can see in the photo below (on the right, taken next to the Pixel when it finally turned up) it looks pretty identical to the Pixel 2 XL, the only thing worth noting in this context being the fact that this is the only size the 1+6 comes in – around a 6-inch screen. It seems to have reclaimed even more screen from the black areas and features the ‘notch’ around the top speaker and camera associated with the iPhone X.
Again the components all seem up to scratch – chip, screen, etc, and it has not one but two cameras on the back. The speakers seemed to distort a bit with Prodigy and Metallica at top volume and you get the impression many of the components, while excellent, might be one level below those of the S9 and Pixel 2 XL. OnePlus does have its own UI skin, but it seemed pretty inoffensive and it also has a fingerprint reader on the back.
The chassis is glass, like the S9, but this is rendered even more irrelevant by the fact that, in a nice touch, the 1+6 comes with a case and a screen protector thrown in. Once more it’s hard to find either a killer feature or deal-breaker with this device – it just seems solid all round, albeit with a pleasantly subtle take on haptic feedback. This has been the case with smartphones for years once the form factor matured; how do you improve on a black touchscreen rectangle with all the latest specs?
But the 1+6 does have one massive differentiator: the price. The whole OnePlus proposition from the start has been to offer a flagship device at a mass market price. The 1+6 costs £469 for the version with 64GB storage. The 64GB S9 costs £739, with the larger Plus coming in at £799 and the 64GB Pixel 2 XL will set you back £799 too.
So the big question isn’t whether or not the S9 Plus or the Pixel 2 XL are better than the 1+6, but whether they’re £330 better. The answer, surely, has to be no. There’s just no way a slightly better set of components are worth pretty much the same as a new low-end Apple iPhone. If I’m paying my own money and EE doesn’t sufficiently incentivise me to sign up for another two-year contract, then the 1+6 seems like a no-brainer.
Disruptive Chinese smartphone vendor One Plus launched its latest flagship device, which offers premium specs for far less money than the competition.
The OnePlus 6 has a 6.28-inch AMOLED display, a Qualcomm Snapdragon 845 SoC, a 16MP main camera, supported by a 20MP secondary camera, loads of RAM and storage and all the other bells and whistles that you would associate with a flagship smartphone. But one of these will set you back around £519, while an equivalent Samsung Galaxy S9 Plus comes in at £869 and a Google wants £899 for a Pixel 2 XL. It might be fun to get hold of all three and compare; watch this space.
“With the OnePlus 6, we challenged ourselves to deliver an external design as smooth and elegant as the work we’ve done inside the device,” said OnePlus Founder and CEO Pete Lau. “We’re proud of what we’ve accomplished, and we hope our users are too.”
O2 has the exclusive operator partnership in the UK right now, but main message from OnePlus over the years has been that you don’t need to get into these big, long contracts to subsidize your flagship phone. Find £500 from somewhere and go SIM-only – the total cost of ownership will be a lot lower. O2 wants £40 per month for a 4GB plan, which comes to £960 over two years, but you can get 6GB SIM-only from them for £15 per month. You can also buy two of these for one iPhone X! Here are the details.