china smartphone market Archives

Singles Day Growth Boosts Odds of China Market Smartphone Recovery in Q4 2023

Growth: China’s YoY smartphone unit sales grows 5% during two-week 11.11 sales period
Drivers: Huawei, Xiaomi and Honor continue to ride strong growth momentum from October
Drivers: Pent up demand provides steady demand through extended sales period
Expectations: Despite earlier promotions by e-commerce platforms, like-for-like weekly sales growth highlights stronger, more resilient demand than last year

Beijing, Hong Kong, Seoul, Boston, New Delhi, London – November 23, 2023

Smartphone unit sales in China during this year’s two-week Singles Day sales event grew by 5% YoY, providing more confidence for a positive fourth quarter.

“This is a good start to the rest of the quarter,” says Mengmeng Zhang, senior analyst for China. “Huawei is continuing its strong run along with Xiaomi, which is enjoying a further spike in sales with the launch of its new 14 series devices.”

China Singles Day 2023 Smartphone Sales Share and YoY Growth

Source: Counterpoint Research Smartphone 360 Weekly Tracker, China. (*2022 spans Oct 31 – Nov 13; 2023 spans Oct 30 – Nov 12.)

Huawei’s success and climb in the rankings has been helped by the recent launch of its Mate 60 series 5G phones and popularity of its older P-series 4G devices. “The company is posting some very good growth numbers, but obviously there’s base effects happening,” notes China analyst Archie Zhang. “We expect it will grow by more than half this year, but that still doesn’t bring them close to pre-COVID levels. But it’s signalling a promising 2024.”

“Apple is improving compared to last month but there still seems to be hiccups in terms of supply,” observes Ivan Lam, senior analyst for manufacturing. “But considering last November’s supply snafu was an anomaly, the YoY numbers could move into positive territory as current supply tightness normalizes.”

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

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Global Foldable Smartphone Shipments Up 10% YoY in Q2 2023, Set for Substantial Growth in 2024

Although overall global smartphone shipments declined in Q2 2023, global foldable shipments rose.
In H2 2023, competition in the global foldable product market is set to escalate significantly, driven by the earnest entry of Chinese companies like OPPO and HONOR.
The global foldable market is expected to experience substantial growth in 2024, driven by the introduction of entry-level foldable products.

The global foldable smartphone market increased 10% YoY in Q2 2023 to reach 2.1 million units, according to Counterpoint Research’s most recent global foldable smartphone tracker. This growth is in stark contrast to that of the global smartphone market, which showed a 9% decline in shipments during the quarter to reach 268 million units. Due to the prolonged Russia-Ukraine war and the ongoing high global inflation, the smartphone market is expected to grow sideways. Nevertheless, the foldable smartphone sector continues to exhibit robust and sustained growth.

Global and China Foldable Smartphone Shipments, Q1 2022-Q2 2023

Source: Global foldable smartphone tracker

The foldable smartphone landscape in the Chinese market presents a particularly intriguing scenario. During Q2 2023, shipments in the overall Chinese smartphone market slipped 4% YoY to reach 61.9 million units, hurt by the recent economic challenges faced by the country, which led to a reduction in consumer spending. However, the Chinese foldable smartphone market achieved notable success, surging 64% YoY to reach 1.2 million units. China now commands the largest share of the global foldable smartphone market, with a 58.6% share.

Foldable Product Launch Status in 2023: Comparison of Global and Chinese Foldable Markets

Source: Global Foldable Smartphone Insight Report

The rapid growth of the Chinese foldable market is primarily attributed to the introduction of foldable products tailored for the Chinese market, coupled with a strong demand for these products among Chinese consumers. In Q2 2023, significant momentum is building for the continued growth of the foldable market. This surge was driven by the introduction of key products such as the Huawei Mate X3, vivo X Fold 2, and vivo X Flip, primarily targeting the Chinese foldable market. Additionally, the global (including China) launch of the Motorola Razr 40 and Razr 40 Ultra, further contributed to this growth trend. In Q2 2023, China saw the launch of five new foldable products tailored for its market, while the global market outside China only saw two foldable product launches during the same period.

Counterpoint Research Senior Analyst Jene Park said, “We believe that these frequent product launches (along with the marketing effects that accompany product launches) are changing Chinese consumers’ perception of foldable products. Consequently, Chinese consumers can access a variety of foldable products more easily and frequently than any other market in the world. The continuous release of various foldable products is recognized as one of the important reasons why the Chinese foldable market has continued to grow significantly compared to other markets.”

Global Foldable Smartphone Forecast, 2023-2024

Source: Global foldable smartphone forecast

The global foldable smartphone market will undergo significant changes in H2 2023. Chinese manufacturers are expanding their presence internationally during this period, with notable releases including the HONOR Magic V2, OPPO Find N3 Flip, and the yet-to-be-named OnePlus foldable device. Notably, Samsung’s Galaxy Z Fold 5 and Galaxy Z Flip 5, considered to be some of the top-tier foldable offerings, were launched in August and are expected to capture a substantial market share in H2 2023.

Park added, “The global foldable smartphone market is set to see significant growth in the H2 2023, driven by the expansion of Chinese manufacturers. Although Samsung’s market share may dip due to increased competition, we believe that it will be a natural result. However, competition among manufacturers usually has the effect of increasing the size of the market for the product. We believe that the era of the mass foldable phone is expected to start in 2024, mainly led by Samsung and Huawei with their entry-level foldables. Entry-level foldables are expected to be priced around $600 to $700, making them more accessible to consumers.”

Global Foldable Smartphone Market Continues to Expand, Underpinned by China

In Q1 2023, global foldable shipments grew 64% YoY to 2.5 million units.
China’s overall smartphone market fell in Q1 2023 but the domestic foldable market rose.
OPPO, Samsung grew rapidly in the Chinese foldable market.
Apple is likely to enter the foldable smartphone market in 2025.

Beijing, Hong Kong, Seoul, New Delhi, London, San Diego, Buenos Aires – July 7, 2023

According to the Counterpoint Research Foldable Tracker and Foldable Insight Report, the global foldable smartphone market increased 64% YoY in Q1 2023, based on sell-in volume, to reach 2.5 million units. This is quite significant because the foldable market rose amid a 14.2% year-on-year decline in the overall global smartphone market during the same period. Foldable smartphone markets in almost all major regions, including China, North America and Western Europe, displayed strong growth in Q1 2023.

Global Foldable Market YoY Growth Rate by Major Region, Q1 2023

The robust growth in the global foldable market was largely driven by the growth in the Chinese foldable market. Although the Chinese smartphone market declined by about 8% YoY in Q1 2023, the domestic foldable market continued to grow, surging 117% YoY to 1.08 million units. Commenting on this phenomenon, Research Analyst Woojin Son said, “In China, new foldable products such as the OPPO N2 and N2 Flip had grand releases. These big launch events constantly pique the market’s interest. Consequently, Chinese consumers have become more familiar with foldable products compared to other regions.”

China Foldable Market Share by OEM, Q1 2023 YoY

OPPO’s strong Q1 2023 performance is noteworthy as it reflects the brand’s success in the Chinese foldable market, which is emerging as the world’s largest foldable smartphone market. OPPO ranked second in the Chinese foldable market with a slight gap with leader Huawei, helped by the N2 Flip and N2 which were released at the end of 2022. In particular, the N2 Flip, OPPO’s clamshell-type foldable, contributed a lot to the increase in the sales of clamshell-type products in China, beating Huawei’s Pocket S. Samsung’s growth in the China foldable market is also noteworthy. Samsung made efforts to target the Chinese market by launching the W23 and W23 Flip, which are variants of the Z Fold 4 and Z Flip 4, respectively, produced mainly for the Chinese market and MEA market. This helped Samsung grow rapidly in the Chinese foldable market in Q1 2023. Commenting on the foldable smartphone market outlook for 2023, Senior Analyst Jene Park said, “We believe that, in 2023, there will be 1) intensifying competition among OEMs in the global foldable market due to more aggressive target market expansion; 2) intensifying price competition; and 3) increasing sales volume of clamshell-type foldable smartphones through various product launches. Also, the Chinese foldable market is expected to continue to grow through 2023 mainly due to the Chinese consumers’ recognition of ‘foldables’ as a premium smartphone, coupled with continuous and frequent new product launches in the country.” Addressing the big question around Apple’s entry into the foldable market, Park said, “Apple is still absent from our short-term forecasts. However, since overall consumer response to foldable phones is improving and Apple will be possibly releasing non-phone foldable products soon, the brand’s participation in the foldable smartphone market is likely to occur after 2025.”

Podcast #64: 2023 China Smartphone Outlook – Reading Between the Top Lines (Mandarin Edition)

As China is opening its borders and quickly getting back to business after over three years of COVID-19 lockdowns and other curbs, we recently conducted an offline customer-sharing meeting in Shenzhen. It was great to see everyone after a long time and share our insights. The developing trends and China’s premium smartphone market outlook were the most discussed topics.

The country’s smartphone market has become quite saturated. While Chinese OEMs are releasing models with newer technologies, the consumer demand for smartphone upgrades is not as strong as before. Moreover, macroeconomics is another important factor affecting consumers’ purchasing power and confidence. With such a scenario, OEMs are shifting their focus to premium devices to increase their ASPs (average selling prices).

In the latest Mandarin episode of The Counterpoint Podcast, host Rick Cui is joined by Research Analysts Archie Zhang and Shenghao Bai. In this podcast, we touch upon several topics, such as Counterpoint’s prediction for the Chinese smartphone market in 2023, the growing interest of OEMs in releasing foldable smartphones, and more. We also talk about how smartphone makers are focusing on self-developed chips and artificial intelligence (AI) among other areas of differentiation.

Click to listen to the podcast

You can read the Chinese transcript here and the English transcript here.

Podcast Chapter Markers

01:14: Archie on Counterpoint’s prediction for China’s smartphone market.

02:49: Shenghao on the China smartphone outlook for 2023.

06:24: Archie on the rising ASPs and why OEMs are focusing on premium devices.

08:32: Archie further talks about OEMs’ growing interest in foldable smartphones.

10:40: Shenghao on Counterpoint’s China and global forecasts for foldable smartphones for 2023.

12:16: Archie weighs in on the current innovations in folding smartphones and the room for improvement in the coming generations.

16:35: Shenghao highlights some future development trends for foldable smartphones.

19:42: Almost all flagship smartphones focus big on imaging, but are there other areas for differentiation for OEMs? Shenghao answers.

22:00: Lastly, Archie also shares some insights on self-developed chips, AI, and other developments that smartphone OEMs are focusing on.

Also available for listening/download on:

China Premium Smartphone Market Outlook: Bright Future Ahead

China’s smartphone average selling price (wholesale) has continuously increased since 2014, reaching $385 in 2022.
The share of high-end smartphones (≥$500 wholesale price) in China’s smartphone market increased to more than 26% in 2022. Though the figure still lagged behind that in developed countries, Chinese consumers’ appetite for premium smartphones will continue to grow.
Chinese smartphone OEMs are committed to bringing consumers a better experience. Smartphones have also been improving and changing in terms of features like form factor, computing performance, display and imaging.
Counterpoint expects that the share of the ≥$500 segment will reach 40% by 2035.

China’s smartphone shipments fell 16% YoY in 2022 to less than 280 million units, the lowest in nearly a decade, according to Counterpoint Research’s data. But still, the Chinese market made up 22.6% of global shipments, much higher than second-placed India’s 12.4%.

Benefitting from the popularity of mobile broadband networks, the booming mobile internet content and application ecosystem, and fast economic growth, China’s smartphone market entered the 2010s with fast growth in shipments and revenues and reached its peak in 2016 with more than 470 million units in shipments. This was also the period when vivo, OPPO, Huawei and Xiaomi developed into major homegrown smartphone OEMs.

However, after the boom ended, smartphone shipments started to decline every year. The market also embraced more intense competition and OEMs increased their focus on product differentiation. Over the past three years, both supply and demand in the market have been further hit by the COVID-19 pandemic.

More and more people have now started questioning the potential of China’s smartphone market. However, we think the market downturn has been exaggerated due to COVID-19, which impacted consumer sentiment and behavior. With China dropping pandemic-related curbs and announcing a 5% GDP growth target for 2023, the economy and consumer confidence should gradually recover. China’s smartphone market is expected to see its first positive growth in 2023 after 2016.

China Smartphone Shipments and Average Selling Price (Wholesale), 2012-2022

Source: Counterpoint Market Monitor Service

China’s smartphone sales revenue in 2022 only fell 11.7% from 2016, though the shipments were down 41.5% in the same period. China’s smartphone ASP has been increasing every year since 2014.

4G and 5G technologies and continuously improving core elements such as processors, imaging and displays have increased the manufacturing cost of smartphones. Major OEMs have also started seeking quality and sustainable development in the face of increasing competition. They are focusing more and more on product innovation and differentiation and investing in long-term technological competitiveness, such as operating systems, AI algorithms, computational photography and self-designed chips. These initiatives are strengthening their R&D capabilities.

Chinese OEMs are also actively practicing social responsibility, such as developing customized features for the visually impaired, hearing impaired and other disadvantaged groups. More environment-friendly materials are being used in smartphone products to promote sustainable development and consumer awareness of environmental protection. These efforts will also help domestic brands grow in the mid-end and high-end markets while offering higher-quality products and services to customers.

The ≥$500 (nearly RMB 4,000 retail price) segment accounted for more than 26% of total sales in China in 2022, up from 11% in 2016 when the market recorded its highest shipments.

With over 1 billion smartphone users, China has become the second-largest high-end smartphone market in the world (nearly 70 million smartphones sold at above RMB 4,000 in 2022). However, compared with other leading high-end markets, China is still well behind in terms of both high-end segment share and individual incomes.

China’s government has announced that the disposable income of its citizens will increase to a new level in 2035, while the proportion of middle-income groups will also increase significantly. Regardless of whether China’s GDP per capita will cross $20,000 (the conventional threshold for a developed country) in 2035, the ASP of smartphones, as well as the premium smartphone share, should continue to grow amid long-term economic growth and steady consumption upgrade..

Share of ≥$500 Segment in Major Regional Premium Markets and GDP Per Capita, 2022

Source: Counterpoint Research

For a long time to come, the smartphone will remain the most important carrier for people’s entertainment, consumption and social interaction, with its lite productivity functions becoming ever stronger. The smartphone itself continues to improve. For example, the popularity of foldable-screen technology adds a new form factor and offers differentiated applications, content and user experience. A larger screen not only steps up the immersive experience for gaming and video but also becomes the optimal production tool for the mobile office with accessories such as stylus and mouse, and fast-developing productivity applications.

Premium Smartphones Will Continue to Improve

Source: Counterpoint Research

Other key elements of the premium smartphone will also improve over time, including processor performance, AI computing power, imaging capability and mobile bandwidth.

First, the latest 3nm-based chipset will go into mass production in 2023. The next-generation 2nm technology is also under progress and TSMC plans to realize mass production in 2025. At the same time, chip design houses will develop higher-performance, higher-efficiency micro-architectures or even new instruction sets for processors. This should significantly improve the comprehensive performance of the flagship SoC platform. The computing power of premium smartphones is expected to approach that of PC.

Second, major Android smartphone brands can offer more differentiated features in their premium products with self-developed hardware and algorithm. Taking photography as an example, multi-lens fusion and computational photography have become mainstream. Also, the resolution of the main camera has reached 200 million, which undoubtedly puts forward higher requirements for related AI capabilities and algorithms. Counterpoint believes that OEMs with self-developed chips can better deal with the challenge.

Finally, wireless technology will continue to improve. With large bandwidth and lower latency, smartphones have become the center of content consumption and production. With the advent of computing networks, smartphones will become the super-entrance to cloud applications, cloud games, cloud enterprises and other cloud-based services. In addition, smartphones are becoming more closely integrated into the smart home, smart transportation and smart city. This also means that in the future, smartphones will become more indispensable for us.

In a word, Counterpoint is always long on the potential of China’s premium smartphone market. In 2023, China’s smartphone shipments will recover to more than 280 million units. The high-end segment is expected to outperform the overall market, realizing a YoY growth of nearly 5%. By 2035, both smartphone ASP and premium smartphone share (≥$500) will be up another notch. Premium smartphones will make up nearly 40% of the total market.

One in Three iPhones Sold in China in 2022 Was iPhone 13

Apple’s iPhone 13 was the best-selling smartphone in China in 2022.
HONOR’s X30 was the best-selling Android smartphone with a 1.8% market share.
Nine smartphones in the top-10 bestseller list were 5G enabled.
HONOR’s Play 20 was the most affordable smartphone on the list.
The sales share of the top 10 models is expected to decrease in 2023.

Beijing, New Delhi, London, San Diego, Buenos Aires, Seoul, Hong Kong – March 27, 2023

In 2022, Apple’s iPhone 13 contributed to 37% of the brand’s smartphone sales in China, according to Counterpoint Research’s Global Monthly Handset Model Sales Tracker. Apple captured the top three spots in the list of China’s top 10 best-selling smartphones, followed by HONOR with four spots, the highest ever for the brand. vivo and OPPO captured two and one spot, respectively. Chinese consumers purchased over 980 smartphone models in 2022, down from 1,100 in 2021.

Apple contributed over 10% of China’s smartphone sales volume in 2022. The iPhone 13 was the best-selling smartphone in China with a 6.6% market share, rising from the third spot in 2021 with a 2.3% share. Also, the iPhone 13’s sales more than doubled in 2022 compared to the previous year. The iPhone 13 was followed by the iPhone 13 Pro Max and iPhone 13 Pro in the next two spots. These three iPhones contributed to 60% of Apple’s smartphone sales in China in 2022. This was the first time that Apple’s Pro variants were in the top 10 list for China.

China Top 10 Best-selling Smartphones Unit Sales Share, 2022

HONOR’s best-ever show in the top-10 list was driven by its strong rebound through the diversification of its offline presence. The brand also expanded its footprint across the mid-tier and entry-level price bands during the year. The HONOR X30 was the best-selling Android phone in China with a 1.8% market share. Also, the HONOR Play 20 was the most affordable and only non-5G smartphone on the list. The HONOR X30 and HONOR 60 were the only smartphones on the list with a Qualcomm chipset.

vivo’s Y33s 5G and Y76s took the seventh and ninth spots, respectively. These smartphones contributed 16% to vivo’s sales in China in 2022. The vivo Y33s featured among the top three best-selling smartphones in July 2022, while the Chinese New Year holiday sales helped the vivo Y76s in entering the top-10 list. OPPO’s mid-tier smartphone A56 5G took the fifth spot in 2022 with a 1.7% market share, like its predecessor A55 5G in 2021.

Overall, the share of the top 10 models in China has been flat at around 22% for the past three years due to the continuous annual sales decline in the country’s smartphone market. Except for the iPhones, all smartphones in the 2022 list were priced at less than $500. Further, there were nine 5G-enabled smartphones on the 2022 list, compared to six in 2021. Competition in the market is heating up, and the top 10 smartphones’ share is expected to decrease by 2023.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media, and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects, and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts

Karn Chauhan

Akshay R S

iPhone Reaches Highest Ever Monthly Market Share in China

One in every four devices sold in China during October 2022 was an iPhone.
While the sales for other key OEMs declined in October, Apple grew 21% MoM. In YoY terms, China’s sales declined 15%, while Apple’s sales declined just 4%.
Apple has emerged as a clear winner of Huawei’s share in the premium market
The iPhone 14 Pro Max was the best-selling device in China in October, followed by the iPhone 14 Pro.

Beijing, Seoul, Taipei, London, Boston, Toronto, New Delhi, Hong Kong – December 1, 2022

Apple reached its highest ever monthly market share (25%) in China in October 2022, while becoming the #1 OEM in the country for the second consecutive month, according to Counterpoint Research’s Monthly Market Pulse Service. October also marked the first full month of iPhone 14 series sales. One in every four devices sold in China during the month was an iPhone.

While the sales for other key OEMs declined in October, Apple grew 21% MoM. In YoY terms, China’s sales declined 15%, while Apple’s sales declined just 4%, which further helped increase Apple’s market share.

Apple has been reaching new heights in terms of market share in China during the last two years. It reached a record monthly market share in November and December 2020, and in October, November and December 2021. Notably, 2020 was also the year when US sanctions were imposed on Huawei.

Apple’s Sales Market Share in China

Source: Counterpoint Research Monthly Market Pulse

Commenting on the market growth in China, Research Director Ethan Qi said, “China’s market has been sluggish due to multiple factors, including macroeconomic pressures and COVID-19 lockdowns hitting consumer sentiment. Overall sales declined 4% MoM. However, Apple managed to defy the market trend. This also shows the resilient nature of the premium segment. Looking at the trend for the last two years in China, it is evident that Apple has emerged as a clear winner of Huawei’s share in the premium market. It has almost become an undisputed leader in China’s premium segment. The iPhone 14 series has started off well with the iPhone 14 Pro and Pro Max performing better than the previous generation. The iPhone 13 also continues to do well, as the iPhone 14 offers little differentiation from the iPhone 13.”

The iPhone 14 Pro Max was the best-selling device in China during the month, followed by the iPhone 14 Pro. Comparing the first five weeks of the iPhone 14 Pro series sales in China with that of the iPhone 13 Pro series sales for the same period, the Pro series share in the iPhone 14 series sales was 70%, compared to 47% in the iPhone 13 series.

Commenting on the trend of increasing penetration of the Pro series in the iPhone 14 series, Senior Analyst Varun Mishra said, “The trend of rising Pro series popularity is not limited to China. It is there in other key markets like the US as well. Apple now offers significant design and specification differentiation between the Pro and non-Pro line-ups. For example, the Pro versions now get the latest processor as well as the dynamic island, which further increases the line-up’s exclusivity. Consumers can see a clear value-addition in spending extra for the Pro versions. In our primary interviews in the past, we also found consumers demanding a larger differentiation for the Pro versions. As a result, there is a clear demand shift towards the Pro line-up in the 14 series. The wait times also suggest the same trend. Delivery times for the Pro series have been 3-4 weeks across key regions with the supply catching up with the demand. Overall, the Pro series will help Apple reach record average selling prices (ASPs) in 2022.”

Please reach out to press@counterpointresearch.com for press comments and queries.

You can also visit our Data Section (updated quarterly) to view the smartphone market share for World, USA, China and India.

Background

Analyst Contacts:

Tarun Pathak

Varun Mishra

* Key Southeast Asia countries include Indonesia Thailand Philippines and Vietnam

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China Premium Smartphone Market Weathers Headwinds to Expand Share in Q2 2022, vivo Takes Second Spot for First Time

China’s premium smartphone sales ($400 and above wholesale price) increased their share in overall sales to 33% in Q2 2022 from 31% in Q2 2021.
Premium smartphone unit sales declined 10%, significantly less than the 14% fall in the overall market sales.
vivo reached the second spot for the first time ever, with its consistent strategy for the high-end segment paying off. HONOR jumped from sixth to fourth place.

Beijing, London, San Diego, Buenos Aires, New Delhi, Seoul, Hong Kong – August 24, 2022

China’s premium smartphone market ($400 and above wholesale price) sales volume share edged upwards to 33% in Q2 2022 from 31% in Q2 2021, according to Counterpoint Research’s Market Pulse Service. Premium segments (which include affordable premium, premium and ultra-premium segments) declined by only 10% in terms of unit sales compared to the broader market which fell 14%. The $600-$799 (premium) and $1,000 and above (ultra-premium) segments recorded increases in Q2 2022.

Exhibit: China Premium Smartphone Market Share by Price Band and YoY Growth, Q2 2022

Source: Counterpoint Research Handset Model Sales, Aug 2022

Commenting on the changes in the premium segment, Research Analyst Mengmeng Zhang said, “After back from COVID-19 in the second half of 2020, China’s smartphone sales reached a temporary peak in Q1 2021 before declining again and reaching the lowest point in a decade in Q2 2022. This trend prevented a big drop in premium segments in Q2 2022. Of course, lockdowns in key Chinese cities impacted the premium segment sales because customers for this segment are mostly based in these cities.”

Zhang added, “Apple did well in the $1,000 and above segment, recording 147% YoY increase, while Samsung also grew 133% YoY. Both these brands benefitted from Huawei’s decline and the shift in purchase trends towards premium phones in China. Driven by the vivo X80 series’ success, vivo grew 504% YoY in the premium segment. The vivo X series perfectly combines design and performance for this segment, helping vivo perform well in online channels.”

Exhibit: Top Smartphone OEMs’ Market Share for Premium Segment in China, Q2 2021 vs. Q2 2022

Source: Counterpoint Research Market Pulse Service, Jun 2022

The top six OEMs took 95% of the premium segment in Q2 2022. vivo’s unit sales grew 91% YoY, displacing Huawei to take the second spot in China’s premium segment for the first time ever.

Commenting on vivo’s performance, Senior Analyst Ivan Lam said, “Apple and Huawei have been competing for the first and second spots for long. But now other major Chinese OEMs have started targeting the premium segment.

In Q2 2022, vivo faced strong competition from HONOR in the $400 and above segment, where HONOR grew unit sales and market share by 43% and 50% respectively. Both vendors managed to gain a significant share from Huawei and OPPO, which gave up a combined share of almost one-sixth of the market. Lam added, “OPPO was especially sensitive to lockdowns and its offline sales got severely impacted during the quarter.”

Commenting on the ongoing trends in the premium segment, Senior Analyst Varun Mishra said, “Leading Chinese OEMs have been actively focusing on the premium segment with concrete strategies, including bringing foldable flagship models customized for Chinese consumers and partnering with traditional camera giants such as Leica, Zeiss and Hasselblad. We expect the competition in this segment to intensify going forward. At the same time, Samsung is capturing a higher share in this segment due to its foldables line-up, which could result in a resurgence for the South Korean vendor.”

Notes: The analysis is based on wholesale ASPs. OPPO includes OnePlus and vivo includes IQOO.

Please reach us at press@counterpointresearch.com for press comments and inquiries.

You can also visit our Data Section (updated quarterly) to view the smartphone market share for World, USA, China, and India.

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Analyst Contacts

Ivan Lam

Mengmeng Zhang

Varun Mishra

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China Q1 2022 Smartphone Sales Drop 14% YoY to Test 2020 Levels; HONOR Registers Highest YoY Growth

vivo led the market in Q1 2022, capturing a 20% share, followed by OPPO (18%) and Apple (18%).
HONOR was China’s fastest-growing OEM (167% YoY) in Q1 2022.

Beijing, New Delhi, Hong Kong, Seoul, London, San Diego, Buenos Aires – April 28, 2022

Smartphone sales in China decreased 14% YoY in Q1 2022, reaching 74.2 million units, according to Counterpoint’s latest Monthly Market Pulse report. The quarter’s volumes were close to the levels seen during the severe pandemic-hit Q1 2020.

Commenting on the Chinese smartphone market performance, Research Analyst Mengmeng Zhang said, “China’s economy grew by only 4.8% YoY in Q1 2022, lower than the 5.5% annual growth target set by the government, as the country was weighed down by the pandemic and related lockdowns. Retail growth also dropped by 3.5% in March, falling for the first time since August 2020. Unemployment rates in big cities also reached record highs. These factors, combined with the downward demand trend already visible in China’s smartphone market before the fresh pandemic wave, impacted the sector significantly.”

She added, “The smartphone market showed a declining weekly trend throughout Q1 2022, with only a small peak during the Chinese New Year holidays. We expect smartphone demand to continue to be underwhelming due to weak consumer sentiment and lack of new innovations to stimulate consumers.”

Commenting on key vendors’ performance, Senior Research Analyst Ivan Lam said, “During the quarter, vivo regained its market-leading position from Apple (in Q4 2021) with a share of 20%. The newly launched mid-end S12 series, which focuses on self-portraits and sports a lightweight and fashionable design, has received positive market feedback, especially among younger customers. vivo’s affordable Y series phones, such as the Y76s and Y31s, were also strong performers during the quarter.”

Although Apple’s sales declined from the previous quarter as momentum for the iPhone 13 series began to fade, the iPhone 13 remained the best-selling smartphone in China during the quarter. Apple has benefited hugely from Huawei’s declining sales as iPhones have become the best alternative to Huawei’s high-end devices. Huawei’s fall has prompted leading Chinese OEMs to put more resources into the high-end segment, but none of them has been able to take up a sizable share in the segment so far.

HONOR has had a strong rebound, with its market share jumping to 17% in Q1 2022 from 5% in Q1 2021. Thanks to the popularity of its HONOR 60, the brand was also the only major OEM that achieved both positive YoY and QoQ growth during the quarter, at 167% and 15%, respectively. HONOR also launched the Magic 4 series globally in Q1 2022, signaling its global ambitions.

Sales of Xiaomi devices declined YoY but outperformed the market with 12% QoQ growth in Q1 2022. Coupled with easing component shortages and strong sales performance of the flagship Redmi K40, Redmi Note 11 and entry-level Redmi-9A, Xiaomi recorded a relatively strong quarter. The launch of the Redmi 50 series and the Redmi 10A in March will further help Xiaomi solidify its position in the < $400 segment.

Despite the disappointing performance in Q1 2022, the leading OEMs continued efforts to strengthen their positions in the high-end segment by launching new flagship lines with foldable models. On the new foldable smartphone segment in China, Senior Research Analyst Ethan Qi said, “Major Chinese OEMs started launching foldable devices in 2021. They view the new form factor as a way to penetrate the premium market further. During the quarter, Huawei’s clamshell-type P50 Pocket and book-type Mate X2, Samsung’s clamshell-type Z Flip 3 and OPPO’s book-type Find N were the top-sellers. However, due to foldable panel supply limitations and high price points, foldable devices accounted for only less than 1% of the market in Q1 2022.”

Background:

Analyst Contacts:

Mengmeng Zhang

Ethan Qi

Ivan Lam

Tarun Pathak

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Apple Reaches its Highest Ever Market Share in China

Smartphone sales in China declined (9% YoY) for the third consecutive quarter in Q4 2021.
Full-year smartphone sales declined (2% YoY) for the fourth consecutive year in 2021
Apple surpassed vivo to become China’s #1 OEM for the first time since Q4 2015, capturing 23% market share, its highest ever.
realme was the fastest growing brand (83% YoY) in Q4 2021.
Four out of five smartphones sold in China in Q4 2021 were 5G capable.

Beijing, Seoul, Taipei, London, Boston, Toronto, New Delhi, Hong Kong – January 26, 2022

Apple surpassed vivo in Q4 2021 to become the #1 brand in China after six years, when the iPhone 6 supercycle was at its peak. Q4 2021 also brought Apple its highest ever market share in China at 23%, according to Counterpoint Research’s Monthly Market Pulse Service. However, China’s smartphone sales in Q4 2021 declined 2% QoQ and 9% YoY, respectively. The country’s full-year smartphone sales also continued the downward trend for the fourth consecutive year, declining 2% YoY in 2021.

Commenting on the overall Chinese smartphone market, Senior Analyst Ivan Lam said, “The market in China continues to decline due to various factors in both the supply side and the demand side. Firstly, the ongoing component shortages are impacting shipments of all OEMs. Secondly, China’s average smartphone replacement cycle is becoming longer. Smartphone designs within brands have also become more homogeneous, especially in hardware, failing to motivate consumers to upgrade. Lastly, China has been experiencing a complex economic environment where exports are driving the growth and domestic spending remains lackluster.”

However, in terms of OEMs, the competition has intensified after Huawei’s decline and the market dynamics are changing rapidly. OPPO was the top OEM in Q1 2021, followed by vivo in Q2 and Q3 and now Apple in Q4.

China Smartphone Market Share, Q4 2020 vs Q4 2021

*OPPO includes OnePlus Source: Counterpoint Research Market Pulse, January 2022

China Smartphone Market Share, CY 2020 vs CY2021

*OPPO includes OnePlus Source: Counterpoint Research Market Pulse, January 2022

Commenting on Apple’s performance, Research Analyst Mengmeng Zhang said, “Apple’s stellar performance was driven by a mix of its pricing strategy and gain from Huawei’s premium base. Apple rose to first place in China right after the iPhone 13 was released (week 39) in September. Afterwards, it remained in the leading position for most of the fourth quarter. The new iPhone 13 has led the success due to a relatively lower starting price at its release in China, as well as the new camera and 5G features. Furthermore, Huawei, Apple’s main competitor in the premium market, faced declining sales due to the ongoing US sanctions.”

vivo and OPPO took the second and third spots respectively, driven by their strong offline penetration and expansive product portfolio strategy. vivo’s performance was driven by the X70 series and S series, and OPPO took off with the Reno 7 series. HONOR also started rebounding in the second half of 2021 after restoring relationships with suppliers. It captured the fourth spot in Q4 2021. Facing more severe component shortages, slower penetration in offline channels as well as competition from HONOR, Xiaomi ranked fifth during the quarter.

The year gone by also proved to be a milestone in terms of Chinese OEMs embracing advanced technology. vivo, OPPO and Xiaomi all launched self-developed chipsets to showcase their investments in semiconductors. OPPO and HONOR also launched foldable flagship models, with more mature designs and highly customized software, especially for Chinese users. Foldables bring a new form factor to the smartphone design. As foldables become more affordable, they are likely to drive some users to upgrade.

Apple’s success in the premium segment is an encouraging sign and will continue to motivate Chinese OEMs to strengthen their footprints in the segment. We expect the smartphone ASP to continue to rise in China as leading OEMs put more effort into increasing it to counter the decline in sales.

Please reach out to press (at) counterpointresearch.com for press comments and enquiries.

You can also visit our Data Section (updated quarterly) to view the smartphone market share for World, US, China and India.

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Ivan Lam

Mengmeng Zhang

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