China Smartphone Market Registers Lowest Device Shipments Since 2013


China is usually considered the hub of consumer electronics manufacturing of the world. Year 2018 registered only 396 million units smartphone shipments in the country

Pic credits – Max Pixel

In what could be a possible indicator towards slowing global smartphone market, a research by Canalys has claimed that the smartphone market in China fell to lowest shipment figures since 2013. Canalys also predicts that market can further slide down by three percent in 2019.

Citing the possible reasons behind the slowdown, the research read, “The natural slowdown as consumers keep their smartphones for longer is one reason, but it has been amplified considerably by the economic slowdown in China and consumers’ weakened purchasing power. The latest quarter, marked a 15 per cent year-on-year drop, and the seventh consecutive quarter of decline.”

It is to be noted here that China is usually considered as the hub of consumer electronics manufacturing in the world. However, year 2018 registered only 396 million units smartphone shipments in the country.

Increase in share of five top smartphone brands

The report further claims that the share of five top smartphone brands in China has increased from 73 per cent in 2017 to 88 per cent in 2018. Huawei, Vivo, Xiaomi, Oppo and Apple make for these five top smartphone brands in China.

Huawei, with 105 million shipments, achieved a record market share of 27 percent in 2018. Mo Jia, analyst based in Canalys’ Shanghai Office said, “Huawei has penetrated the high-end with technological innovations, and a strengthening brand, which has helped it markedly extend its lead in China. Its dual-brand strategy has been a huge success, with sub-brand Honor helping it cover a broad range of price bands. China continues to be a strong foundation for Huawei, and its launchpad for overseas expansion as Huawei aims to challenge Samsung for global leadership in 2019.”

Change in Vivo’s position

There has been a significant change in Vivo’s position as per Yiting Guan, a research analyst at Canalys.

He said, “Vivo now has a more streamlined portfolio of devices, with a diversified Y-series, the online-only Z-series and the experimental Nex. It has also benefited from a strategy to improve the efficiency of its retail channels. The stabilizing renminbi/US dollar exchange rate will help Vivo, which has a greater reliance on its domestic market than its rivals in the top five.”

Xiaomi failed to grow in its home country

Xiaomi, which has developed rapidly in overseas markets, failed to grow in China. Owing to a disappointing second half, it ranked fourth on the list with shipments falling by six per cent.

“Xiaomi tried to increase its average selling price in China. It has decided to make Redmi an independent sub-brand designed to directly compete with Honor. Xiaomi’s challenge in 2019 will be to accurately position the two brands, in terms of product, pricing and channels, so that they complement and do not cannibalize one another. If each brand can redefine its positioning well, each will achieve greater market share in 2019,” said Guan.

2018 was the toughest year for Apple in China

Apple, as per the report, had the toughest year of the top five in China. Its shipments fell 13 per cent, as customers, as per the report, were deterred by the high pricing of its new iPhone. However, Apple is the only non-China based smartphone brand to make it in the list of top five smartphone brands in China.

Jia said, “Apple has several challenges in China, and the growing power of competitors is not actually its biggest. As its services division becomes more important in China, it is vital for Apple to maintain or grow its installed base of iOS users. Apple must re-examine its China strategy, and find a way to revive its high-end brand imagine, in order to align with the purchasing behavior of local middle-class and upper-class demographics.”