Samsung and Huawei enhanced the use of their own smartphone application processor by more than 30 percent in the third quarter of 2019 – impacting the chipset business of their rival Qualcomm, according to IHS Markit | Technology.
Share of Qualcomm, the top third-party supplier, fell by 16.1 percent in the third quarter as Samsung and Huawei are enhancing the consumption of their own application processors in their smartphone products.
“Samsung and Huawei both are taking strategic steps to realign their smartphone product lines and supply chains away from third-party processor solutions and toward their own self-made alternatives,” said Gerrit Schneemann, senior analyst, smartphones, at IHS Markit | Technology.
Samsung used its own Exynos processor in 80.4 percent of its mid-range smartphone devices, Galaxy A Series shipped in the third quarter of 2019, up from 64.2 percent during the same period in 2018.
Samsung used Exynos processors in 75.4 percent of all smartphone devices in Q3 as against 61.4 percent in Q3 2018.
The share of MediaTek and Qualcomm in Samsung smartphones declined to 2.3 percent and 22.2 percent respectively from 9 percent and 27.5 percent one year earlier.
Huawei used Kirin in 74.6 percent of its smartphones in Q3 2019 as compared with 68.7 percent one year earlier.
Previously, Huawei used its Kirin chips mainly in flagship devices. However, the company now is expanding the reach of its in-house solution to more price ranges, including the Nova and Y-series mid-range phones.
“The U.S. government ban is prohibiting Huawei from sourcing technology from U.S.-based firms, including Qualcomm,” said Anna Ahrens, senior analyst, smartphone and mobile, at IHS Markit | Technology.
U.S.-based Qualcomm’s portion of Huawei shipments decreased to 8.6 percent in Q3 2019 from 24 percent in Q3 2018.
Taiwan’s MediaTek increased its share of Huawei phones, rising to 16.7 percent in Q3 from 7.3 percent a year earlier.
The top six OEMs — Samsung, Huawei, Apple, Xiaomi, OPPO and vivo — accounted for 77 percent of the global smartphone market in Q3. Apple uses 100 percent native application processors. This leaves Xiaomi, OPPO and vivo as the major customers of Qualcomm and MediaTek.
Xiaomi’s adoption of MediaTek has increased since the second half of 2018. Qualcomm’s deployment by Xiaomi accelerated rapidly in the third quarter.
Xiaomi used MediaTek for the Redmi 6 series, which is one of the high-volume smartphone lines released by Xiaomi in 2018. However, the Redmi 7 series adopted Qualcomm chipsets in 2019.
Qualcomm’s share of OPPO smartphones declined from 82 percent in Q1 2019 to 42 percent in Q3.
MediaTek’s share of OPPO shipments accounted for 58 percent in Q3. This development was due to OPPO’s increasing shipments of low-end models, resulting in a higher adoption rate of MediaTek chips.
Vivo is steadily increasing its adoption of MediaTek chipsets. Vivo shipped 46 percent of its smartphones with processors made by MediaTek in the quarter. This is a significant increase from 27 percent during the same period in 2018.
Qualcomm has 31 percent share in the mobile processor market in the third quarter, followed by MediaTek at 21 percent. Samsung’s Exynos and Huawei’s Kirin recorded 16 percent and 14 percent respectively.