The technology analyst firm Counterpoint Research said Qualcomm had lost some ground to Chinese vendor Huawei which had increased the use of chips based on designs from its HiSilicon unit during the quarter due to US curbs.
Counterpoint vice-president of research, Neil Shah, said: "While the overall smartphone market declined due to the ongoing pandemic, the decline in market share for Qualcomm was partly also due to Huawei, which increased the use of HiSilicon application processors after US restrictions, and its growing share in China, the world’s largest smartphone market.
"Qualcomm’s share in Huawei (including Honor) smartphones declined from 12% in Q2 2019 to 3% in Q2 2020.”
Shah added: “It is not all bleak for the smartphone segment. For example, 5G smartphone sales more than doubled (+126%) in Q2 2020 from just a quarter ago. This trend will try to offset the overall decline in the first half and fuel the growth back in 2021.
"This will also create significant opportunities for application processor suppliers to increase the share of semiconductor content even if the overall market volumes remain lower this year. Furthermore, the restrictions on Huawei will drive the growth for Qualcomm, MediaTek and Unisoc.”
Research analyst Shobhit Srivastava outlined the potential shift in share of the market due to the Huawei curbs. "OPPO, vivo, realme and Xiaomi will be the key drivers for Qualcomm and MediaTek as they look to fill the big gap which Huawei might leave behind in near- to mid-term," he said.
"And this could be more beneficial for Qualcomm in the premium segment (US$400+ wholesale), especially in China, where Huawei dominates with more than 40% market share, and in the mid- to high-tier segments in markets like Europe.
"In the mid and low segments, MediaTek with its affordable 4G and 5G solutions will gain popularity in markets such as China, Russia and Middle East & Africa as realme and Xiaomi look to target Huawei’s market share.”
Srivastava said the growing use of 5G would be a driver for cloud gaming. "Additionally, we are also seeing increasing demand for casual and advanced gaming at the mass-market level. Thus, the affordable smartphone segment with gaming capabilities is estimated to grow a massive 1011% in 2020," he said.
"Smartphone application processor vendors are capitalising on this opportunity by launching solutions with higher clocked GPUs and support for higher display refresh rates – 90 Hz, 120 Hz and even 144 Hz, elevating the gaming experience in the affordable segment.
"With 5G coming to lower price segments, mobile gaming is estimated to grow further due to its low latency connectivity. As a result, we are seeing OEMs working with vendors to add more models with gaming capabilities via solutions such as MediaTek G-series and Qualcomm G variants in the Snapdragon 6 series.”