Recently, Counterpoint released a new report for the smartphone market and in it the market research firm predicts that the average price of 5G SoCs for smartphones is expected to drop to US$20. This should happen by the end of this year to the beginning of next year. This will make the 5G smartphones become even more popular.
Jeff Fieldhack, research director at Counterpoint Research, said that 5G technology has moved from the high-end smartphone market priced above $500 to the mid-range market priced between $250 and $550. In some countries, it has even become cheaper. The average price of a 5G SoC falls between $40 and $50 currently. In this regard, Fieldhack believes that the average price of a 5G chip is expected to drop sharply to $20 later this year. In other words, the smartphone manufacturers will be more interested in producing low-cost 5G phones for $150.
Counterpoint data shows that in 2021, global Android smartphone AP (application processor)/SoC (system-on-a-chip) sales will increase by 3.6% year on year. Not surprisingly, MediaTek will take first place in the market with a 46% market share. The second place will be occupied by Qualcomm with a 35% share. As for the previous year, most of MediaTek’s market share came from mid-to-low-end models priced below $299 wholesale. In this sense, the Dimensity 700/800 series chipsets were quite popular and were the main reason why MediaTek could become so popular.
Qualcomm has been struggling with the tight supply of mid-range solutions throughout the year. Even switching to 4G SoC solutions wouldn’t help it to meet market demand. In the $300+ premium segment, Qualcomm continues to dominate with its Snapdragon 7 and 8 series. In the $399+ Android camp, it has (yet) no rivals. Due to it, its chipset (AP/SoC) and RF front-end component revenue continued to increase, resulting in a higher BoM share.
Due to the tight supply since last year, Qualcomm is focusing on increasing the supply of Snapdragon 7 and 8 series chipsets. This is not the only way to improve its competitiveness in the high-end market. We mean it is offering chips such as leading RF front-end product portfolio, ultrasonic fingerprint sensor, and fast charging.
Qualcomm continues to dominate the mid-to-high-end ($300-$499) smartphone market with a 65% share in 2021, up from 53% in 2020. Meanwhile, Qualcomm’s share of the $500+ smartphone market increased from 41% in 2020 to 55% in 2021 with the launch of flagship chipsets Snapdragon 888 and 8Gen 1.
Counterpoint pointed out that Qualcomm is improving chipsets through computing (CPU, DSP, GPU), artificial intelligence (NPU), connectivity (4G, 5G sub-6GHz, 5G mmWave, Wi-Fi6/6E), security or gaming performance high-performance experience, and highly optimized RF front-end components are the key to providing advanced connectivity experience. Honestly, these have become a major competitive advantage of Qualcomm at the system level.
MediaTek’s growth in 2021 will mainly come from the sub-$299 (wholesale) smartphone market. The sub-$99 market is driven by LTE smartphones, with MediaTek accounting for 62% of the market. In the $100-$299 Android smartphone market, MediaTek dominates the market with a 52% share, mainly thanks to the Dimensity 700 and 800 driving the mass 5G smartphone market in China, India, the US, and parts of Europe. It enabled brands such as Realme, Xiaomi, OPPO, and VIVO to launch 5G phones at retail prices below $200.
The Dimensity 1100/1200 has helped MediaTek increase its share in the price range of $300-$499, and its market share was increased from 6% in the previous year to 24% in 2021. The launch of Dimensity 8100/8000 is expected to strengthen its market share in this range. With the Dimensity 9000, MediaTek hopes to enter the high-end market above $500 in 2022, and almost all Chinese smartphone OEMs, including OPPO, VIVO, Xiaomi, and Honor, will launch models equipped with this chipset. Counterpoint predicts that MediaTek is expected to capture about 10% of the high-end smartphone market.
Samsung has faced serious problems in the SoC field in 2021. So it’s logical to learn that its overall performance declined.
In the mid-to-low-end market of $100 to $299, Samsung’s SoC share dropped to 7% from 17% the previous year. In the mid-to-high-end segment, it fell from 13% the previous year to 6% in 2021.
Counterpoint pointed out that this is mainly due to Samsung Mobile outsourcing many of its models (A, F, and M series) to ODMs. The latter mainly use solutions from Qualcomm, MediaTek, or UNISOC. Plus, there are no updates in the mid-to-high-end Exynos series SoCs. This is also the main reason why ODMs switch to other solutions. The absence of the Note series and Qualcomm’s design advantage in Samsung’s foldable led to a further decline in Exynos’ chipset share.
With the Galaxy S22 series, Qualcomm is winning a higher percentage in the market than ever, mainly due to Qualcomm’s product leadership and low yields for Samsung’s Exynos chipsets.
In 2021, UNISOC achieved surprising growth in the smartphone market in the sub-$200 price range. Chips from this manufacturer are only targeting the market below $100. In 2021, Realme, Honor, Motorola and Samsung have launched mobile phones equipped with these chips. In this sense, we should point out that the manufacturer succeeded to win some orders from the Samsung Galaxy A series.
The data shows that in 2021, UNISOC got a 26% market share in the market below US$99 and a 4% share in the US$100~199 market.
Counterpoint expects UNISOC will maintain its growth momentum this year, and its product portfolio will make up for the LTE smartphone market demand as MediaTek is addressing supply issues in this area, while Qualcomm is more focused on 5G solutions.
Due to the U.S. ban, HiSilicon SoC’s share of the $500-plus smartphone market fell sharply to 16% in 2021, from 30% the previous year. However, we should point out that Huawei had managed to stock up a sufficient amount of chips before the ban. Counterpoint expects that in 2022, sales of HiSilicon SoCs will decline further as inventory runs out.
Huawei has started using Qualcomm SoCs in its new models, but only for 4G solutions.