In 2021, the market pattern of 5g mobile phone terminal will be reshaped. A new round of Apple craze is expected to drive 5g machine change tide, and relevant industrial chains will usher in incremental investment opportunities.
The iPhone 12, which has delayed its launch and received negative news, will eventually become the best-selling 5g smartphone in 2020.
In the list of self operated mobile phone sales of jd.com in November, the total sales volume of iPhone 12 series was close to 1 million, ranking the first among 5g smart phones. However, affected by trade sanctions and chip shortage, the sales volume of Huawei mate 40, Apple’s biggest competitor, was less than 200000, even surpassed by Xiaomi 10 and Hongmi k305g.
The booming growth of iPhone 12 sales represents the possibility that the market structure of 5g mobile terminal will be reshaped in 2021. At the same time, the upsurge of Apple mobile phone is expected to drive the 5g replacement tide of nearly 1 billion stock users and bring incremental investment opportunities to relevant industrial chains.
Huawei, apple, Xiaomi, how to interpret the future pattern
In the second quarter of 2018, Huawei surpassed apple to become the second largest smartphone supplier in the world. In the following few years, under the background of Apple’s lack of innovation and Samsung’s frequent security problems, Huawei has gained a firm foothold in the global high-end smartphone field by virtue of its excellent product strength and brand power.
However, with the help of the whole country, chip has become the biggest constraint to Huawei’s mobile phone business. In 2020, mobile phone covid-19 was affected by the new crown epidemic. The demand for smart phones declined. But thanks to the accumulation of user base and reputation, HUAWEI sales remained strong, and kept the position of the world’s second oldest. However, according to counterpoint data, in terms of year-on-year growth rate, Huawei’s global shipment volume fell by 24% in the third quarter of this year, becoming the most serious decline in sales among major manufacturers.
Sorted out the global smartphone shipments
1. The decline in shipments was mainly due to the loss of market share in Europe
In 2019, Google will cut off GMS (i.e. use Google maps, email, video and other basic services), and Huawei will have a big test in the European market. In 2020, the UK will join the camp of blocking Huawei, and Huawei’s living space in Europe will be further squeezed.
In terms of data, Huawei’s sales share in Europe from 2019q3 to 2020q3 dropped from 22.2% to 14%, with an average loss of nearly 8% in a year. It can be predicted that in the short term, under the repeated trade wars, chip and service restrictions will still be Huawei’s weakness in overseas expansion. Since this year, Huawei has gradually shrunk its front line and turned its main battlefield back to China, which also means that Huawei’s market share in Europe may continue to shrink at a rate of no less than 8% every year in the future. According to the estimated annual sales of 200 million mobile phones in Europe, it indicates that the stock of nearly 16 million mobile phones per year will be shared by other manufacturers.
2. Xiaomi may become the main beneficiary of this European substitution war
Thanks to the success of the first battle of high-end strategy and the comprehensive expansion of online and offline channels, the sales share of Xiaomi in Europe from 2019q3 to 2020q3 increased from 6.3% to 18.9%, with a year-on-year growth rate of 200%. According to Puyin International’s forecast, even in the worst case, Xiaomi still has a chance to win 34% of Huawei’s European market share in the future.
According to Xiaomi financial report, in 2020q3, Xiaomi’s overseas market revenue was 39.8 billion yuan, up 52.1% year on year, accounting for 55% of the total revenue. Among them, the shipment volume of smart phones in the European market increased by 90.7% year on year, and the market share rose to 18.9%, surpassing Huawei and apple to become the third largest smart phone brand in the European market.
2020q3 European smartphone market share
3. The domestic situation is not optimistic
With the clarity of the European market structure, Huawei’s domestic situation is not optimistic. According to sources, Huawei’s hoard of chips will run out in early 2021 at the earliest. If the chip problem can not be solved after that, Huawei’s production of high-end machines will be greatly limited, thus affecting its leading position in the domestic market. According to canalys, in the third quarter of this year, Huawei’s domestic market shipment volume dropped to 34.2 million units, a year-on-year decrease of 18%, and its market share dropped from 44.3% in the second quarter to 41.2%, with a significant loss of market share.
Another aspect of Huawei’s loss of domestic market share is Apple’s renewed efforts to the domestic high-end market. After the launch of the iPhone 12 in mid October, in addition to the stock of fruit powder, some Huawei users and swing users who could not compete with mate 40 also turned to apple, which once again boosted Apple’s rush to buy in China.
In November 2020, China’s domestic brand mobile phone shipment decreased by 28% year-on-year, while the overseas brand mobile phone shipment increased by 99.7% year-on-year (in recent years, the domestic sales of overseas brands are mainly from Apple), which also reflects from another perspective that apple is making efforts to seize Huawei’s share in the domestic high-end market.
Besides apple, Huawei’s threats in the domestic market also come from Xiaomi, oppo and vivo. In November, Huawei officially divested its glory business in an attempt to survive. In the later stage, if glory is not limited, Huawei’s position in the domestic low-end machine field is expected to be maintained. However, since it will take at least half a year for glory to resume the purchase and order of chips, during this period, Xiaomi, oppo and vivo still have the opportunity to seize part of Huawei’s low-end market share in the domestic market.
Although such a process is painful, we still need to treat it rationally from the perspective of investment. Benefiting from the increase of market share of apple and Xiaomi, the supply chain companies related to them are expected to usher in a burst of performance. At present, A-share listed supply chain companies are mainly concentrated in the field of structural parts and functional parts. According to the 2021 strategy report of electronic group of China CITIC construction investment securities, it is suggested to pay close attention to the segmentation leaders such as lucent precision, Lansi technology, Xinwei communication, Pengding holdings, and the main engine plants such as Xiaomi group.
Apple and Xiaomi mobile phone supply chain company
Apple’s hot sale, investment opportunities under 5g replacement tide
Mobile phone mobile phone demand declined in 2020 covid-19, and the global smartphone shipments in the first 11 months were 907 million, down 10% from the same period last year. However, with the large-scale listing of 5g mobile phones, the global sales of 5g mobile phones are growing against the trend. Take China as an example. In the first 11 months, China’s 5g smartphone shipment reached 144 million units, a year-on-year increase of 71.4%, accounting for more than 50% of the national smartphone shipment.
China’s mobile phone and 5g mobile phone shipment in 2020
In 2021, the alleviation of the global epidemic and the release of Apple’s 5g mobile phones are expected to accelerate the 5g replacement tide (institutions predict that Apple’s global stock of users exceeds 1 billion). Guojin securities predicts that the penetration rate of global 5g mobile phones in 2021 is expected to reach 35%, and the shipment volume will reach 500 million.
The arrival of 5g era will lead the innovation and upgrading of mobile phone parts, and bring new opportunities to the consumer electronics industry chain (mainly in the fields of RF module, chassis, camera, etc.). For example, the application of millimeter wave will increase the number of antenna structures on the side of filter and terminal system. Considering the influence of metal shell on signal reception, ceramic and glass shell have obvious advantages in 5g communication.
Data source: Ping An Securities, 36 krypton
1. RF front end industry chain
Mobile phone RF module includes antenna, RF front-end and RF chip, which is mainly responsible for receiving, transmitting and processing radio waves. The function of the antenna is to convert the RF signal and the electromagnetic signal. The RF chip is mainly responsible for the conversion between the RF signal and the baseband signal. The RF front end is responsible for amplifying and filtering the received and transmitted RF signal.
RF module structure
With the opening of 5g era, communication performance has become an important index to measure mobile phones. The RF front-end, as the core component, plays an important role, which directly affects the signal receiving and sending of mobile phone.
The demand for RF front-end is increasing rapidly. From 2G to 5g, the number of frequency bands is expected to increase from 8 to more than 50, which means that mobile phones need to carry more RF front-end devices to support the needs of different frequency bands. According to the prediction of major international manufacturers, the number of filters of mobile phone RF front end of all China Netcom in 5g mature stage will increase from more than 70 to more than 100, and the number of antenna switches will also increase from more than 10 to more than 30.
The value of RF front-end devices increased. At the same time, the advent of the era of thin mobile phone also puts forward higher requirements for the volume, performance and integration of RF devices, so as to improve the procurement cost of various devices. In terms of the value of mobile phone terminals, according to the comparison between Samsung Galaxy S10 + 5g (sub6g) and 4G, the value of RF front-end in the bill of materials (BOM) has increased from US $31 to US $46, with a price increase of nearly 50%.
Samsung Galaxy S105G vs. 4G
Integration and modularization are the future trend. With the maturity of RF front-end module technology and market demand, the main RF front-end in the market began to develop in the direction of modularization. Modular integration has two modes: SOC on chip and hybrid integrated SIP packaging. Traditional RF manufacturers such as Broadcom, qorvo, skyworks, Murata and TDK not only supply multiple types of components, but also have the ability of module integration, which will further establish their advantages in the highly concentrated market. Baseband manufacturers such as Qualcomm and Ziguang zhanrui also join in the modular competition, and the advantages of integrated integration are obvious The development direction will become the general trend.
There is a bright future for domestic substitution. In the field of RF front-end, American and Japanese enterprises occupy a relatively high market share. In 2019, Broadcom ranks first with a global market share of 20%, followed by Murata with a market share of 19%, and the top five companies together account for 87%.
Global pattern of RF front end
China started late in the field of RF front-end and its development is weak. However, in recent years, with the rise of domestic mobile phone brands, Hisilicon and Ziguang zhanrui have achieved import substitution in some products. RF front-end enterprises represented by Zhuosheng micro, Weijie Chuangxin, Wuxi Haoda, Huizhi micro and Guomin Feixiang have gradually mastered key technologies and penetrated into the supply chain of well-known mobile phones.
Taking Zhuosheng micro as an example, the shares of its switch, low noise amplifier (LNA) and tuner products in Samsung, Xiaomi, oppo and vivo have increased rapidly. At the same time, the company focuses on the module market, and continues to promote difem (diversity receiving module, integrated RF switch and filter), lfem (diversity receiving module, integrated RF switch, low noise amplifier and filter) ）, lnabank (diversity receiving module, integrating multiple RF low noise amplifiers), WiFi front-end module (WiFi front-end module, integrating WiFi PA, RF switch, low noise amplifier) and other module products have made good progress. They have been promoted and applied in Samsung, Xiaomi, oppo and other customers, and have good domestic replacement opportunities.
To sum up, considering the incremental demand for RF front-end devices in 5g era and the general trend of modularization, Ping An Securities Electronic Group suggests to focus on leading companies in the industry chain such as Zhuosheng micro and Xinwei communication.
RF front end A-share listed companies
2. Camera industry chain
In recent years, mobile phone manufacturers regard optical upgrading as an important innovation field. After entering the 5g era, driven by the rise of both quantity and price, cameras are expected to become one of the most promising investment areas.
In terms of quantity, the number of single camera in 5g era has been increasing from single camera, double camera, three camera, four camera to five camera; in terms of price, it has developed from a single pixel to the introduction of large aperture, ultra wide angle, periscope telephoto, movie camera, TOF and other characteristic lenses, and the camera standard has been upgraded to drive the improvement of single ASP.
Number and specification of mobile phone cameras increased
The number of single camera continues to increase. At present, the overall trend of smart phones carrying multiple cameras is very certain. The mainstream scheme in the market is that the three camera + TOF rear camera scheme gradually infiltrates into the middle and low-end models; the four camera + TOF is the standard configuration scheme of the flagship model rear camera; the double camera + TOF is the standard configuration scheme of the front camera. Overall, the average number of cameras in a single mobile phone will reach 6-7 in the future.
According to the data of Ping An Securities, from January to October 2020, the penetration rates of single camera, double camera, three camera and four camera are 4.4%, 19.8%, 38.9% and 36.9% respectively, and the penetration rates of three camera and four camera are steadily increasing. At the same time, with the increase of smartphone shipment brought by 5g replacement tide next year, the demand for Smartphone cameras is expected to reach 6 billion and 6.8 billion in 2021-2022, with a year-on-year increase The speed was 19% and 13% respectively.
Specification promotion drives the growth of single machine ASP. With the improvement of consumers’ requirements for photo quality, camera specifications continue to upgrade. At the end of 2019, Xiaomi released the new cc9 series, which adopts five camera in the rear and single camera in the front. For the first time, the pixels of mobile phone camera will reach 100 million pixels, with 8p lens (exclusive version). With the increase of the number of lenses used in pixel and lens group, ASP material for single lens will continue to grow.
5g replacement wave brings camera volume and price rise
To sum up, thanks to the large-scale production of 5g mobile phones and the optical innovation of superimposed cameras, the camera related industry chain will still have investment opportunities in 2021, driven by the rise of both volume and price. According to the view of Guosheng securities electronic group, it is suggested to focus on Shunyu optics, crystal optoelectronics, Ruisheng technology and other industry chain leaders.
Mobile camera listed companies
3. Glass backboard industry chain
With the advent of 5g era, the trend of smart phone appearance demetallization has been established due to the shielding effect of metal on the signal. With the comprehensive advantages of performance, cost and production capacity, glass has become the best choice for appearance demetallization.
Since Apple released the front and back glass design for iPhone 8 and iPhone X in 2017, the back glass design is becoming more and more popular. According to the data of counterpoint, the penetration rate of glass backed smart phones is 26% by the end of 2018, of which the high-end market has reached 80%. It is estimated that the penetration rate of glass backed smart phones may reach 60% by the end of 2020
In view of this, Founder Securities proposed to focus on glass backboard related A-share listed company Lansi technology.
Glass and ceramic backboard listed companies
Editor in charge: GT