The worldwide smartphone market showed signs of improvement in the third quarter of 2020 (3Q20) with shipments declining just 1.3% year over year, according to the latest IDC report. In total, 353.6 million smartphones were shipped during 3Q20 and while the market declined, the results were stronger than IDC's previous forecast of a 9% year-over-year decline. This is largely attributed to the re-opening of economies around the globe as COVID-19 restrictions were gradually relaxed.

The report further noted that larger, more developed markets like China, Western Europe, and North America all witnessed the largest declines in 3Q20. Given these are the largest markets for Apple, the month delay in the iPhone 12 launch contributed to the decline.

However, across many of these markets 5G promotions are starting to heat up and a full array of products is quickly becoming available to consumers at all price points.

Apple shipped 41.6 million iPhones in 3Q20, down 10.6% year over year, which placed the company in fourth for the first time with 11.8% share. This drop was expected and is mainly due to the delay in the launch of the new iPhone 12 series, which is usually in the third quarter.

That aside, the iPhone 11 series did exceptionally well, contributing the majority of Apple's volume, followed by the SE device.

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Looking ahead, we expect Apple to grow in coming quarters with strong early demand for iPhone 12 paired with robust trade-in offers across major carriers, especially in the U.S.

Samsung reclaimed the top position in 3Q20 with a market share of 22.7% after shipping 80.4 million smartphones, up 2.9% year over year. The stats clearly show that Samsung's return to the top spot was due to Huawei's 22% decline in shipment due to losing access to U.S. technology and Google software.

Huawei continues to face challenges due to the ever increasing impact of the U.S. sanctions, which are taking a toll on its performance even in China as the brand is trying to pace out its shipments over a longer period.

Due to the launch of Apple's iPhones being pushed into the October quarter, Xiaomi was able to temporarily overtake Apple in the standings at #3. Clearly Xioami is picking up sales that would have gone to Huawei if the U.S. sanctions were not in effect. In India, Xiaomi's production capacity recovered to nearly 85% of its pre-pandemic level, which helped it cater to strong demand.

IDC's next report for calendar Q4 2020 or Apple's Q1 2021will without a doubt show Apple rebounding and likely breaking records. The temporary dip is understood in context with mild COVID-19 delays and not because there's a problem with Apple's iPhone sales that still did well for the quarter without new iPhones.

Apple's CEO and CFO on iPhone

Apple's CEO Tim Cook stated during yesterday's Financial Conference Call that Apple's "results for this quarter were ahead of our expectations, driven by stronger than expected iPhone and services performance. As we anticipated, we launched new iPhone models in October, a few weeks later than last year's mid-September launch. Up to that mid-September point, customer demand for iPhone was very strong and grew double digits.

Cook added that "Greater China is the region that was most heavily impacted by the absence of the new iPhones during the September quarter. Still, we beat our internal expectations in the region, growing non iPhone revenue, strong double digits and iPhone customer demand grew through mid-September."

Apple's CFO, Luca Maestri, stated during the conference call that "While COVID-19 and social distancing measures impact the store operations in a significant manner, demand for iPhone remained very strong. In fact, through mid-September, customer demand for our current product line up to double digits and was well above our expectations.

Luca added that "Our active installed base of iPhones reached a new all time high thanks to the exceptional loyalty of our customer base and strength of our ecosystem. In fact, in the U.S., the last survey of consumers from 451 Research indicates iPhone customer satisfaction of 98% for iPhone 11, 11 Pro and 11 Pro Max combined.