China smartphones Q2 2017: Samsung, Apple Slip as Domestic Brands Rule

Smartphones shipments in China grew a modest 3% annually during Q2 2017 (Apr-Jun), registering second consecutive quarter of annual growth this year. The Chinese market showed a positive uptick in demand as well as supply during the June ending quarter. June seasonally is a strong month for China as it is usually buoyed by portfolio upgrades from major brands such as Oppo, vivo and Xiaomi. The top four Chinese brands now capture close to 69% of the market as these brands have raced ahead of international and other local brands with expansive distribution reach and exciting portfolio.

Huawei and vivo were the fastest growing brands followed by OPPO and Xiaomi, together cementing the top four spots and extending their lead over Apple and Samsung by a widening margin. Apple’s performance continue to be seasonal, while Samsung is losing out to the Oppo-Vivo onslaught in offline. Xiaomi made a surprise comeback after being on decline for a few quarters against Huawei Honor.

Exhibit 1: % Smartphone Shipment Growth for OEMs in Q2 2017

As predicted, last quarter, the Chinese smartphone market saw a healthy sell-out through April, May of the second quarter with some level of inventory correction allowing the Chinese brands to ship more smartphones in June with a revamped portfolio.

Exhibit 2: % OEM Smartphone Shipment Share in Q2 2017

Source: Market Monitor – Q2 2017preliminary estimates

Huawei continued to capture the top spot this quarter ahead of rivals OPPO and vivo, shipping higher volumes into the channels. Huawei’s nova, enjoy series along with flagship P10 were in strong demand during the quarter.

OPPO and vivo were able to also grow significantly over last year with strong performance in mid-tier with A and Y series respectively as well as with F/R and V/X series in high-tier respectively. Each of the series are well positioned in the fast-growing $100-$199 (600-1300 rmb) and affordable premium $300-$399 (2000-2700 rmb) segments catering demand from tier-1 cities to tier-4 towns.

Meanwhile, Xiaomi saw a positive uptick growing 20% YoY and almost doubling the volumes sequentially after a dip in Q1 2017 when the vendor’s volumes reached almost 2013 levels. The key reason behind the comeback can be attributed to strong demand for its latest flagship Mi 6 and low-tier models such as Redmi 4X as well as focus on diversifying distribution channels.

The days of easy growth are over for Huawei, OPPO, vivo and Xiaomi in China. The competitive landscape is converging as all the top four Chinese brands have reached a steady and dominant position in a very slow growing market. The race for the top two spots is always up for grabs as one misstep can push a brand easily two spots behind.

The comeback of Xiaomi from the declining spiral has made the market further competitive and almost a zero-sum game. The dip in performance by either of brand could affect their global performance. As a result, China dependent brands such as OPPO, vivo and Xiaomi will be aggressive in expanding their reach beyond China during the second half of this year. India, South Asia and Africa will be the key focus geographies to drive additional scale and market share to make up any dip in domestic market.

China Clocks A Record 100 Million Smartphone Shipments in Q4 2013

Global smartphone market continued to grow by leaps and bounds thanks to the fast-growing emerging markets on the cusp of smartphone demand inflection point. According to our quarterly Market Monitor research, total smartphone shipments crossed 300 million units mark globally for the first time in a single quarter, during Q4 2013. To put into context, the total smartphone shipments in 2010 reached 300 million units. While the 2010-2012 growth was driven by mature developed markets across Americas and Europe, the next 2013-2015 growth will be driven by emerging markets of Asia, Africa & Americas. Key market driving this growth in near- to mid-term is China.

Let’s look at some stats & trends in China mobile phone market from our Q4 2013 report:

  • Smartphone shipments in China crossed 350 million units mark for the full year 2013 and 100 million units mark in a single quarter of Q4 2013, a global record. Massive Scale
  • China is now bigger smartphone market than North America and Europe combined in terms of smartphone volumes.
  • China accounts for one in three smartphones shipped globally
  • China smartphone penetration of total mobile phone shipped in 2013 stands at a surprising 88%. Feature Phones are dead in China
  • Chinese OEMs enjoy a combined 70% of the total smartphone market share. A tough market for international brands as smartphone channel now tightly controlled by operators
  • Stronger international brands such as Samsung & Apple together control a combined 26% of the rest of the 30% market
  • Lenovo was the second largest smartphone supplier in 2013 following Samsung as the leading supplier at 12% share. Will be challenged by Huawei & Xiaomi in 2014
  • Huawei, Coolpad and Apple are battling to become the third largest smartphone supplier in China. Huawei growing faster than both
  • Top five OEMs captures more than 55% of the Chinese total smartphone market. 2014 will see emergence of Xiaomi, Oppo and Tianyu
  • Android (& other AOSP ) captured a combined 91% of the total smartphone shipments in 2013

Counterpoint Research - China Mobile Phone Market TAM


For detailed smartphone, featurephone data and insights by OEMs, best-selling models for China or other markets please contact

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