Chinese Smartphone Market Has Slowed, But Huawei, Oppo & Vivo Have Not!


Beijing, Seoul, Hong Kong, New Delhi, London, Buenos Aires, San Diego

May 16, 2016

According to the latest research from Counterpoint’s Market Monitor service, the demand for smartphones in China softened during Q1 2016 (Jan-Mar) as the smartphone shipments were down 2% annually and 13% sequentially.

Commenting on the results, Research Director, Neil Shah, highlighted, “Inspite of the Chinese holiday season quarter, the Chinese smartphone market demand reached a standstill. This has led to intense competition between the players as they struggle to take share away from each other. In a market with hundred of brands, growth is now limited to a handful of players with the greatest marketing budgets and headturning designs, and available at competitive price points.

Only five brands registered healthy growth during the quarter. Oppo, Huawei and Vivo drove the majority of the volume, capturing a combined 40% of the total Chinese smartphone market. Demand for rest of the brands declined, especially Apple after the strong demand for iPhone 6 & 6 Plus in the quarter a year ago, and lackluster performance from Lenovo, ZTE and Coolpad”

Exhibit 1: % Smartphone Shipment Growth in Q1 2016


The Chinese smartphone market saw a lull in the first two months of 2016, however sales for smartphones started to pick-up in March, with the largest sales contribution from Huawei, Oppo and Vivo, the new leaders in Chinese domestic market.

Exhibit 2: % OEM Smartphone Shipment Share in Q1 2016


Commenting on the vendor performance, Research Director James Yan, noted, “Huawei, the market leader, has actively developed a multichannel strategy including operators, ecommerce, offline channel and its own-branded stores. In addition, with improved design language across its portfolio, increased marketing spend has helped Huawei build both its brand and product awareness. It has grown by leaps and bounds over the last eighteen months. The rising popularity of Mate series, P series and Honor series including the promising launch of the P9 family, will help it maintain this position.

The growth of Oppo & Vivo can be attributed to stable retail channel strategy, aggressively going after a bigger piece of the offline pie, compared to an operator-led or e-commerce strategy like Huawei or Xiaomi respectively. With greater emphasis on product design and channel strategy, Oppo with its popular R series (R7 and R9) is gaining traction in tier-2 and rural markets whereas Vivo is well positioned in the RMB 1500-2500 wholesale price bands with rising sales for its X series (X6 & X6 Plus) and a volume-driver in the Y series.

Xiaomi has the potential to remain in the top three players with the help of high-volume models such as Redmi Note 3 and Redmi 3, though the flagship Mi 5 will be the one to watch out for as Xiaomi streamlines the supply for one of the best specified smartphones in the affordable premium segment.

Android flagships such as Huawei’s Mate 8, Oppo’s R9, Xiaomi’s Mi5 and Vivo’s Xplay 5, have enough legs to drive a halo effect for these brands other products in coming quarters. There is a close race within the top five spots and a lot will depend on the portfolio effectiveness over time and promotions strategy for these brands.

Apple with slowing traction for its flagship iPhone 6S will be in a relatively vulnerable position until the iPhone 7 launch, as the initial response to the smaller screen size iPhone SE has been muted. In contrast, Samsung’s Galaxy S7, which has been tracking 20% higher than its Galaxy S6 at the same point last year, can drive a sequential uptick and increased momentum for the Korean vendor in coming months.”

Key Market Highlights:

  • Smartphone shipments now contribute to 98% of the total mobile phone volumes.
  • LTE smartphone shipments contributes to 98% of the total smartphone volumes.
  • Top six brands captured almost three quarters of the market.
  • The sub-1000 RMB wholesale price segment is still a third of the market, dominated by Xiaomi, Huawei, Oppo and Coolpad.
  • The premium 3000+ RMB segment is close to a fifth of the market, dominated by Apple, Samsung & Vivo


Counterpoint Technology Market Research is a global research firm specializing in Technology products in the TMT industry. It services major technology firms and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of 13 years in the high tech industry.