1. 5G

UBS forecast 246M global 5G smartphone unit shipments (sell-In) in 2020, or 20% of total smartphone shipments. For 2021, they forecast 442M (33% of total). Their initial forecasts are 670M 5G smartphone unit shipments in 2022, increasing to 1.135B in 2025 or 80% of total. (UBS report)

2. 5G BOM

Consistent with those forecasts, and assuming that incremental smartphone bill-of-material (BOM) savings are passed to customers, UBS estimates that global 5G smartphone ASPs could decline by 12% per year from 2020 to 2025. This would mean that global 5G smartphone ASPs could reach a USD446 price point in 2021, USD341 in 2023 and below USD300 in 2025. Those outcomes would be dependent upon multiple variables. UBS introduces scenarios based on variables and key outcomes. (UBS report)

UBS’ teardown analysis of Xiaomi Redmi K30 5G indicates no specific cost-savings compared with comparable 5G phones, implying that most of the low ASP would be absorbed by Xiaomi margins. The launch ASP of the Redmi K30 5G 128GB was CNY2,299 (USD350). When adding to costs of manufacturing, freight/logistics and warranty, UBS estimates a product gross margin of 9% — broadly in line with the corporate average. But considering opex/sales, they estimate operating margin would be about -2%. (UBS report)

After comparing all 5G smartphone models launched by major OEMs so far since end-2019, UBS assesses that 5G smartphone starting prices on average are about 35% above 4G models. While the price differential is not entirely attributable to 5G, as refreshes are accompanied by other specification upgrades, UBS believes the perception is likely that 5G devices come at a premium broadly proportional to this. With more mid-range models hitting the market in 2H20 and more so into 2021, UBS expects the gap to gradually narrow. (UBS report)

3. OEMs and ODMs

According to TF Securities, global top 10 vendors, except Apple, have begun to cooperate with ODM manufacturers to develop low-end smartphones. In 2019, the TOP 5 mobile phone ODM companies shipped 285M smartphones, an annual increase of 20M units, with customers focus on smartphone vendors such as OPPO, Xiaomi, Huawei, Samsung, Lenovo and LG. Among them, Wingtech, Huaqin and Longcheer accounted for more than 90% of the top 3 ODM manufacturers in smartphone shipments. (TF Securities report)

Tech Leader/PM who focuses on 3D (Imaging/Photonics/Sensing, LiDAR/ToF) and 3A (AV/Auto, AR/VR, AIoT/5G)…. linkedin.com/in/ymarc; http://4da.tech/

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