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This year, the global smartphone market shipments are expected to shrink by 5% year-on-year to reach 1.2 billion units. However, judging from the performance in the fourth quarter, the overall performance shows signs of recovery. Counterpoint, a market research firm, expects smartphone shipments to increase 3% year-on-year in the fourth quarter of this year.
IDC analyst Guo Tianxiang also said to the titanium **APP, "as the upstream material inventory level tends to normal, the manufacturer's channel inventory is also declining, coupled with the year-end many times, this year's Q4 whether it is the global or Chinese smartphone market has a high probability of returning to positive growth." ”
It should be pointed out that the competition in the terminal market is not only the competition between mobile phone manufacturers, but also the quality of the market environment and the changes in product structure, which will also have a certain impact on upstream chip manufacturers. According to the global smartphone AP (application processor) report released by Counterpoint Research for the third quarter of 2023, MediaTek ranks first in the industry with a market share of 33%, while Qualcomm relies on flagship processors to dominate the smartphone AP market with a revenue share of 40%. It is worth noting that with the big sales of the Huawei Mate 60 series, Huawei HiSilicon returned to the top five in the market with a revenue share of 3% in the third quarter. Some institutions predict that by the end of this year, Huawei's Mate60 series shipments will be about 20 million units, and Huawei's annual mobile phone shipments are expected to be 40 million-50 million units. At the end of the year, the launch of Huawei's nova12 series will further boost HiSilicon's revenue.
In addition, with the deployment of large models on the mobile phone side, the direction of high-end competition among mobile phone chip manufacturers has also shifted to "AI Phone". Counterpoint expects generative AI smartphone shipments to be around 47 million units in 2023, accounting for about 4% of the total smartphones. In 2024, shipments are expected to exceed 100 million units, accounting for 8%.
Previously, MediaTek and Qualcomm have shown their emphasis on and investment in AI capabilities. We believe that the AI capability on the end will become an important driving force for the reshaping of the mobile phone processor pattern. While improving the original performance, the stronger AI carrying capacity will also occupy a larger share in the high-end market with higher profits. MediaTek sells more, not as high as Qualcomm's income Today's smartphone industry, unlike the "a hundred flowers" terminal brand, the players in the processor market are more fixed, and the market positioning is clearer.
Apple's A-series processors are dedicated to the iPhone, and the number of shipments depends entirely on the sales of the iPhoneThe Android camp is basically a competition between Qualcomm and MediaTek, both of which cover each product line, but the difference in performance and brand makes Qualcomm more dominant in the flagship market and has become the first choice for Android flagship. 
Judging from the data of the third quarter, thanks to the recovery of demand for low-end smartphones, the shipments of MediaTek Dimensity 7000 series have further increased, pushing it to gain a 33% market share. Qualcomm ranked second with a market share of 28%. In September, the release and sale of the iPhone 15 series drove the growth of Apple's A-series processor shipments, winning 18% of the market share. However, a high market share does not mean that revenue and profits are also high, MediaTek occupies a third of the market, but more of it is low-end processors, so it does not have an advantage in terms of revenue. According to the data, MediaTek's revenue share in the third quarter was 15%.
In contrast, Qualcomm dominated the smartphone AP market in the third quarter with a 40% share, and the Snapdragon 8 Gen 2 and mid-range flagship processors were equipped by more terminal manufacturers, further driving its revenue growth. The same is true for Apple, which has an 18% market share and 31% of its market revenue. According to public information, the A17 Pro processor carried by the iPhone15 Pro series uses the 3nm process, which is more costly, making it higher, and the revenue share has also increased by 23%. In the list published by Counterpoint, we see a figure that we have not seen for a long time. In the third quarter, Huawei HiSilicon returned to the top five in the industry with a revenue share of 3%. As for the specific sales share, it was not disclosed in the list. However, since it ranks behind JLQ Technology, it can be known that HiSilicon's share is less than 02%。
On August 29th, Huawei Mate60 Pro was not sold first, which caused a rush in the market, and then a series of products such as the Mate60 standard version were put on the shelves, which is also hard to find. The data shows that after the release of Huawei Mate60 Pro, the weekly sales of Huawei mobile phones have grown rapidly.
Counterpoint analyst Ivan Lam told Titanium App that Huawei's return will have an impact on every mobile phone brand, especially those with similar rankings. The hot sales of the Huawei Mate60 series will further affect the pattern of China's high-end mobile phone market, and it is estimated that there will be a fluctuation in the ranking of the Q4.
According to data from Counterpoint, Huawei's mobile phone sales in the third quarter increased by 37% year-on-year, and the increase in the past four weeks reached 83%, and the Mate60 series is still in short supply, with a price increase of more than 1,000 yuan in the secondary market. Some institutions predict that by the end of this year, Huawei's Mate60 series shipments will be about 20 million units, and Huawei's annual mobile phone shipments are expected to be 40 million-50 million units.
The big sales of Huawei Mate60 series have also had a certain impact on upstream chip manufacturers. An industry chain person revealed to us that Huawei's return was expected by Qualcomm and MediaTek, but I didn't expect it to be so fast, "Huawei's offensive is very strong, unless Qualcomm and MediaTek can bring a qualitative breakthrough in experience, which will trigger a wave of replacement." Previously, Tianfeng International** analyst Ming-Chi Kuo had issued an article saying that Huawei purchased 23 million-25 million and 40 million-42 million mobile phone SoCs from Qualcomm respectively, and if Huawei uses all its own chips next year, then Qualcomm will lose this part of the order. At the same time, he also expects that Qualcomm's SoC shipments to Chinese mobile phone brands in 2024 will be at least 50 million to 60 million fewer than in 2023 due to Huawei's use of its own processors, and it is expected to continue to decrease year by year. 
On December 26th, the Huawei nova12 series will be officially released, and it is reported that the Pro and Ultra will be equipped with a downclocked version of the Kirin 9000S. As a series of products under Huawei's mobile phones, the blogger "Mobile Phone Chip Master" once posted that the stock of the nova12 series far exceeds that of the Huawei Mate60 series, which is tens of millions and has a huge impact on the sales of other Android mobile phones.
From Huawei, the number of reservations for Huawei's nova12 series has reached 1.66 million. It is foreseeable that as Huawei's mobile phones get back on track, HiSilicon's sales and revenue share will accelerate.
HiSilicon has strong capabilities in the global semiconductor industry. Due to the impact of sanctions, HiSilicon's chip shipments in 2022 have dropped significantly," Archie Zhang, a research analyst at Counterpoint, told Titan **APP, "but with the successful mass production of Kirin 9000S chips, HiSilicon's market share will recover in 2023." At the same time, in other fields besides mobile phones, such as servers and AI computing chips, HiSilicon's corresponding products will also help HiSilicon restore its market share. ”
The consumer electronics industry is a long-cycle industry, and the biggest factor has never been the economic cycle, but the innovation cycle", said Zhao Ming, CEO of Honor, for this round of the big decline in the mobile phone industry. Nowadays, most of the reasons for the growth of the mobile phone replacement cycle are due to the lack of innovation, which is transmitted to the entire industrial chain, making the upstream and downstream "crossed".
This year, under the boom of AI large models, terminal industries such as PCs and mobile phones have been activated, which has also given upstream chip manufacturers a new competitive point. According to IDC**, by 2026, nearly 50% of terminal equipment processors in the Chinese market will have AI technology.
Counterpoint also expects generative AI smartphone shipments to be around 47 million units in 2023, with shipments expected to exceed 100 million units in 2024 and 52.2 billion, accounting for 40% of smartphones, with a compound growth rate of 83% from 2023 to 2027.
Ivan Lam, a senior analyst at Counterpoint, pointed out to the Titanium App, "The current penetration of AI will eventually become one of the must-have functions of smartphones." And the replacement, in the case of rational consumption, is more considered when the performance is insufficient. ”
AI large models of mobile phone manufacturers, titanium **APP mapping.
As a terminal with annual sales of more than 1 billion, mobile phones have always been considered the best application carrier for all new technologies. At present, Huawei, Xiaomi, OPPO, vivo and other mobile phone manufacturers have released new flagship products equipped with device-side large models. Compared with the cloud model, the device-side model is more secure in terms of privacy and security, as well as the corresponding speed.
Zhong Xiaolei, an analyst at Canalys, told Titanium **APP, "The large model runs locally on the mobile phone, which has a lower latency than the cloud, and offline operation can also better protect user privacy." ”
Stimulated by terminal demand, it will also force mobile phones to improve hardware performance, such as increasing storage, battery life, and the research and development of chips such as NPU. Minsheng ** has released a research report saying that the "miniaturization" and "offline" models have emerged, and the iteration of edge-side terminals and chips is expected to accelerate.
At present, Qualcomm and MediaTek have also successively released the latest flagship chips that run through large models on the end side, such as the third-generation Snapdragon 8 mobile platform that can run through 10 billion parameter large models on the terminal, and the Dimensity 9300 can support the terminal to run 1 billion, 7 billion, 13 billion, and up to 33 billion parameters of AI large language models. 
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Titanium APP believes that this AI large model boom is an opportunity to reshape the pattern for both the terminal market and the upstream chip market, especially after Huawei's return, there is another powerful opponent in the market. For MediaTek, it has always wanted to make achievements in the high-end market, and "AI Phone" has become another opportunity to prove itself.
However, while bringing increments to the upstream and downstream, "AI Phone" should also beware of the situation that the gimmick in the industry is greater than the actual situation, which requires the joint training of chips and terminal manufacturers to improve efficiency through the optimization of software and hardware. If the so-called AI chips are blindly equipped just for the sake of iteration, it will only prolong the replacement cycle of the terminal market again. (This article was first published by Du Zhiqiang, edited by Zhong Yi).