China's smartphone market saw its largest decline in terms of shipments during the first quarter as competition heated up, pushing Apple into fifth place.
Canalys, the market research firm, reported last week that smartphone shipments in China were down to 91 million units, a decline of 21 percent on a year-over-year basis during the first quarter. The Chinese smartphone market initially surpassed the current shipment volume back in the fourth quarter of 2013, noted the research firm.
Among the leading handset players in China, Canalys said eight of the top 10 saw annual declines in shipments. Samsung Electronics’ shipments declined to less than half of what the company shipped in the first quarter of 2017. Huawei was one of the few that had an uptick in shipments, with a 2 percent increase. With shipments of more than 21 million smartphones in the first quarter, Huawei maintains its first-place position with a market share of around 24 percent.
“The level of competition has forced every vendor to imitate the others’ product portfolios and go-to-market strategies,” said Canalys research analyst Mo Jia. “But the costs of marketing and channel management in a country as big as China are huge, and only vendors that have reached a certain size can cope.”
Oppo (second place) and Vivo (third place), both of which are local players, took the largest hit, with shipments falling around 10 percent for both companies. Xiaomi, which pushed Apple out of the fourth-place spot, saw shipments increase 37 percent to 12 million units.
“Xiaomi is the only vendor in the top five that is focused on the sub-RMB1,000 (about US$160) price segment and it owes close to 90 percent of its shipments to Redmi," said Canalys research analyst Hattie He. However, the vendor is struggling to shed its low-cost image. “The launch of the Mi Mix 2S in Paris and the very recent Mi 6X in Wuhan are clear efforts by the company to change customers’ perception of the brand, especially in China, where Xiaomi needs to tempt those looking at Honor, Oppo or Vivo to buy its products.”
According to Canalys, the top four vendors controlled more than 73 percent of shipments in the first quarter.