Shulou(Shulou.com)11/24 Report--

Shubham Mazumdar is a well-known doctor in Los Altos (Los Altos) in Silicon Valley. In his spare time, his biggest hobby is digital devices, especially playing with all kinds of smartphones. This is how we know each other. As a senior "computer enthusiast", according to his own introduction, he has bought seven or eight smartphones almost every year for the past decade or so.

But unlike other American digital enthusiasts, Mazumdar has a particular preference for Chinese smartphones. He is a loyal Android, but not very interested in Samsung. There are so few choices in the US market that Chinese smartphones have opened up another world for him. Over the years, he has bought Chinese smartphones, including OPPO, vivo, Xiaomi, Huawei, Glory and many other brands.

"Chinese mobile phones have brought me a variety of choices, not only a very cost-effective product, but also a lot of user-friendly features, such as double-open App and photo scanning, and so on. There are too few choices for Android phones in the United States, Google Pixel 6a (pre-tax price of $450,450, equivalent to 3000 yuan) screen or 60hz refresh rate, and other parameters such as cameras and screens of motorcycle phones are mediocre." This is how he explains his preference for Chinese smartphones.

In order to buy newly released China's flagship smartphones, Mazumdar always buys them online or asks Chinese relatives and friends who come to the United States to carry them along, because some domestic phones are only sold at home, and there is no international version of ROM. In the past two years, transportation between China and the United States has been beset with difficulties, and he has also lost the channel to buy human flesh. His wife is Chinese. )

Mazumdar went to so much trouble to buy Chinese smartphones, of course, because they were not available in the United States, and he could not buy them from official channels (except the one listed in the United States). As he said, due to the collective lack of smartphones in China, American consumers have only a handful of middle and high-end phones to choose from except Apple and Samsung, and "computer lovers" who want to play Android can only look for Chinese smartphones online.

What is the size of the smartphone market in the United States with annual revenue of $75 billion? The US smartphone market peaked in 2018, with a total of $79.1 billion and shipments of 163m units, according to Statista. Although it declined slightly in the following years, it rebounded significantly in 2021 after the outbreak.

Last year, the total revenue of the US smartphone market was $74.7 billion, up 2.3 per cent from a year earlier; shipments totaled 147m units, up 6 per cent from a year earlier. It is worth mentioning that the average sales price of the US smartphone market exceeded $500 last year, indicating that this is a mature market dominated by mid-and high-end mobile phones.

By comparison, China's smartphone market, according to IDC, shipped 329 million units in 2021, up 1.1% from a year earlier. The Indian smartphone market shipped 161 million units last year, a total increase of 7 per cent. The population of the United States is about 350 million, which is 1/4 of that of China and India.

The proportion of Americans who own smartphones has grown from 31% to 88% in the past decade, according to eMarketer. 96% of young adults between the ages of 18 and 49 already own smartphones. 83% of middle-aged and elderly people aged 50 to 64 own smartphones. 61% of people over the age of 65 own smartphones.

However, such a huge market with annual revenue of nearly $75 billion and the average price of mobile phones of more than $500 is almost "monopolized" by the two manufacturers. In the past decade, the US smartphone market has shown a pattern of "Errenzhuan". Apple and Samsung control 80% of the market, while others have less and less space.

Although the statistics of each market survey company are different, no matter which company reports, the market advantages of Apple and Samsung are unshakable. According to data from Statcounter in July this year, Apple accounts for 55.2% of the US smartphone market, with one company accounting for more than half of the market. Samsung, which ranks second, has a market share of 30.4%. The two major manufacturers have controlled as much as 85% of the market share. Canalys's statistics also show that the combined market share of the two major manufacturers is more than 75%.

This is not the quarter with the highest market share in Apple. The fourth quarter after the release of the new iPhone is the peak season for iPhone sales. Apple can even surpass Samsung in global market share, topping the list of exclusive sales, especially in the United States. In the fourth quarter after the launch of iPhone 12 in 2020, Apple's market share in the United States even exceeded 65%.

The North American market, including the United States and Canada, is Apple's largest source of revenue. In the second quarter of this year, apple reported revenue of $37.47 billion in north America, accounting for more than 45% of apple's revenue, compared with $19.29 billion and $14.6 billion in Europe and greater china.

Apple's iPhone business contributed 49 per cent of revenue to $40.66 billion in revenue in the quarter, thanks to hot sales of the iPhone 13 series. According to CounterPoint, a market research firm, the iPhone 13 series accounts for more than 80 per cent of total iPhone sales. Based on Apple's market share in the United States, it is estimated that more than half of Apple's iPhone is shipped in North America.

By contrast, according to IDC's global market data for the second quarter of this year, the combined share of Apple and Samsung is only 38% (Samsung 22%, Apple 16%), while Chinese Xiaomi, OPPO and vivo together account for 32% (14%, 9% and 9%, respectively). The combined share of the three Chinese manufacturers last year was as high as 38%.

The market pattern has not changed for a decade. Apple has only one competitor in the United States, and that is Samsung. Samsung launches its flagship phone at the beginning of each year, while Apple releases the iPhone at the end of the third quarter, with sales peaks staggered and market share declining. The first quarter is usually Samsung's best-selling quarter, while the fourth quarter is Apple's best-selling iPhone.

The "Errenzhuan situation" that the two supergiants dominate the US market has been going on for a decade. Apple's iPhone US market share broke through the 50 per cent mark for the first time in 2012 and has not fallen below the 50 per cent threshold since, according to Statcounter. Samsung's market share has remained above 25% since 2014, reaching a high of 34%.

In the past decade, the two major manufacturers in the US smartphone market have withdrawn, making Apple and Samsung completely lose their competitors.

HTC ranked second in the U.S. smartphone market after iPhone with a 21% market share in 2011. But over the next few years, the forerunner of the Android phone fell quickly, and the u.s. market share fell below 1% in 2017, eventually disappearing from the market altogether.

In April last year, LG officially announced its withdrawal from the smartphone market, abandoning its 26-year-old mobile phone business. The mobile phone maker, which once occupied the third place in the global market, has long occupied 7% of the market share by shipping medium-and low-end phones in the US market through carrier channels. Even though LG will continue to sell some low-end phones on the open market in 2022, carrier channels have disappeared.

(photo Note: there are only a handful of mobile phone brands available for Verizon, the largest operator in the United States.)

Shipments still depend on operators, even though the rest of the global market has already completed the transformation, the US smartphone market is still an absolutely dominant market dominated by operators. In this market pattern, even products that are not competitive in other countries can get considerable shipments as long as they enter the channel of American operators.

What other mobile phones are available in the US market now? In the networks of the four major operators, apart from Apple and Samsung, there are only Motorola, Google Pixel and one plus, and occasionally Kyocera, TCL and Nokia. In the open market, there are ZTE, Sony and other brands can choose to buy.

As a direct result of the lack of competition, Apple and Samsung phones have an absolute share of shipments in carrier channels. In early 2020, a survey by Wave7 Reserch, a market research firm, estimated that 90% of phones sold by u.s. carriers in December 2019 were apple and Samsung. These two mobile phone brands even account for 95% of AT&T sales.

American consumers are habitually dependent on operators. Before 2015, Americans were used to bringing home a contract iPhone for as little as $199. Of course, their monthly contract phone bill is more than $75 (based on the 2GB traffic package). But after operators have eliminated subsidies, Americans are still used to buying mobile phones from carriers before getting into the network. (there are still operators offering subsidies ranging from $100 to $200 to buy phones on the network. )

Whether or not to enter the operator channel directly determines the shipment volume of a mobile phone. The most direct example is that although LG phones have been losing ground around the world over the past few years, they have been able to maintain steady shipments in the United States and even rank third in the market. In the third quarter of 2020, North America accounted for 64 per cent of LG's smartphone shipments. The lack of competition in the American market is also reflected from this point of view.

Before 2017, ZTE also relied on carrier channels to ship a large number of low-end mobile phones. At its peak in 2016, ZTE sold 70 phones at the same time among the four major operators, with annual shipments of more than 16 million, ranking fourth in the US market after Apple, Samsung and LG. But it all depended on operators, and for well-known reasons, ZTE then said goodbye to the US carrier platform and quickly disappeared in the US market.

(photo Note: motorcycles rank fifth in the US mobile phone market over $400.)

After LG announced its withdrawal from the smartphone business, Lenovo's Motorola became the biggest beneficiary, filling in LG's previous mid-and low-end mobile phone business and entering the top three in the U.S., Runar Bjorrhovde, an analyst at LG out of the motorcycle pickup market, wrote in a report. 'Motorcycles have found new market opportunities by relying on carrier channels, with a particular focus on prepaid and mid-range phones,'he wrote.

Canalys's first-quarter statistics show that Motorola's share of the U. S. smartphone market has finally exceeded double digits. Years after its launch, Google's own brand Pixel finally gained a 3 per cent market share in the US, with quarterly shipments of 1.2 million units, gaining a foothold.

Motorola, an American brand, fell off a cliff after it was sold to Google in 2011, withdrawing quickly in other parts of the world and even falling below 1% of its market share in the United States. After being acquired by Lenovo, Motorola shipped through the channels of the two major operators, Verizon and AT&T, and maintained a share of 3% in the United States, and finally ushered in the opportunity for LG to withdraw from the market.

However, the channel volume of operators does not represent the trend. Statistics from CounterPoint last year showed that Motorola was even less competitive in the United States than Google and Yiga in the mid-to-high-end smartphone market, which sells for more than $400. In fact, in all major regions of the world, Motorola has only entered the top three in the middle and high end of the Latin American market. Latin America is Motorola's traditional advantage market, especially in South American countries. )

Yijia mobile phones have been sold in the United States since the first generation of products in 2012, but sales have been unable to achieve a breakthrough because of the limited channels on the official website. Thanks to continuous efforts, one plus finally entered the third largest operator T-Mobile in the United States in 2018, and then entered the largest operator Verizon channel in 2020. According to CounterPoint, one plus's share of the u.s. market exceeded 1% for the first time until 2021 and continued to rise to 2% this year, on a par with Google Pixel shipments.

Chinese phones are not available because there are only a handful of smartphones available in the US market, and Android players like Mazumdar can only buy a wide variety of Chinese smartphones through the Internet for a long time. But he also worries that his fun of playing with computers may not be long, because Chinese mobile phones can no longer be used in the United States.

Since last year, mainstream US operators such as AT&T have implemented whitelist mechanisms to impose network restrictions on uncertified smartphone devices, and the biggest impact is on those users who use Chinese smartphones in the United States. Mazumdar found that many domestic mobile phones, such as Xiaomi and OPPO, could not access the mobile network one after another, and became Wi-Fi devices that could only be used at home. In order to use Chinese mobile phones, he also uses T-Mobile cards in addition to the AT&T package used by the whole family.

"in addition to AT&T blocking Chinese mobile phones, Verizon also does not activate non-American mobile phones. Although T-Mobile 's network access policy is still relatively loose, it is not known how long this policy will last. Also, 5G doesn't work, and Wi-Fi Calling doesn't support it. Not to mention Huawei, the last two Huawei phones I bought were the Mate 30 Pro and the P 30 Pro, but even if I managed to install the Google framework, it was very inconvenient to push messages. I have seldom bought Chinese mobile phones in the past two years. Maybe I can't play with them any more. " Mazumdar said with disappointment.

Mazumdar is not satisfied with the motorcycles and one plus that are available in the US market. " Motorcycle near the native system is very clean, but the screen and many other hardware are general, the photo algorithm is not good, there is no unique function, the performance-to-price ratio is general. I have been using the one plus phone since the first generation, and almost every generation will buy it, but after the 9 series, I began to be disappointed and decided not to buy any more. Not only software upgrade delay, OxygenOS is also a pile of bug, upgrade release of new firmware will not solve the old bug. "

Although it is difficult for Chinese mobile phones to enter the United States in the past decade, ZTE, Coolpad and TCL have all accounted for a large number of shipments in the United States through carrier channels, but the number of low-end phones that rely on channels also means that they do not have any brand influence. The truly competitive Chinese smartphone brands, Huami Blue and Green, are deterred from the American market, and even if they are ambitious, they are turned away.

Huawei reached a sales partnership with AT&T for the Mate 10 series in January 2018, but was forced to stop at the last minute by the US government before the new product was released. The huge marketing expenses invested by Huawei for this have all come to naught. Yu Chengdong lamented slightly angrily and helplessly on the CES stage, "Huawei's inability to access the US carrier network is a great loss for Huawei, a loss for operators, and a loss for American consumers."

As the US tech blog 9to5Google commented, the US smartphone market seems completely different from the rest of the world. Chinese smartphone makers such as OPPO and Xiaomi do not sell in the United States, and that will not change in the next few years.

This is the most profitable market in the world, with annual sales of nearly $75 billion and an average sales price of more than $500. Apple and Samsung are making a lot of money. This is also the most closed market in the world. Apple and Samsung dominate 80% of the market share, and entering the carrier channel means that shipments are guaranteed. And here for Chinese manufacturers, it is a castle beyond the reach of the distance.

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