A recent report from American research firm IDC shows smartphone shipments in China surpassed 117 million in the fourth quarter of 2015, an 8% year-over-year growth partly driven by the sales of Chinese smartphone maker Huawei.
“China’s smartphone market has undergone great changes as telecommunication operators reduce smartphone subsidies and consumer preference varies,” said IDC’s senior market analyst Tay Xiaohan.
Xiaomi, Huawei and Apple were the top three smartphone makers in 2015. But in 2013 Samsung, Lenovo, and Coolpad dominated the market, and Samsung outstripped other rivals, Tay said.
Xiaomi remained China’s leading smartphone manufacturer in 2015, but its average selling prices were the lowest among the five top players and its increase in shipments mostly came from low-end Redmi devices, the report suggested.
Earlier, the company seized significant market share by adopting the aggressive strategy of “hunger marketing” while China’s smartphone market was experiencing rapid growth. With China’s market slowing down right now, it’s unlikely to see new game changers like Xiaomi.
“Xiaomi’s shipments actually increased in 2015 as compared to 2014. Its performance in 2016 will depend on its success in expanding its offline channels, and whether it can continue to grow its low-end Redmi series and gain more popularity with its mid-range phones. Given the popularity of its low-end Redmi series, it is likely to continue to be one of the top three players in China,” Tay told AllChinaTech.
Huawei achieved obvious growth in 2015 by investing in R&D, products and branding, the report said. The company grew faster in terms of average selling prices and shipments than other rivals. Sales growth in Huawei’s new flagship products and devices priced between USD 200 to 500 posed a threat to Samsung in the high-end and mid-range phone markets. Huawei will continue to push up average selling prices to steal Samsung’s market share in China.
In the high-end phone market, Huawei’s competition with Apple will become more fierce. In December, Huawei announced that its smartphone shipments last year surpassed 100 million to make it China’s largest domestic smartphone vendor. Richard Yu, CEO of Huawei’s Consumer Business Group has publicly said that the brand aims to overtake iPhone in two years.
Apple is still a strong and desirable brand for Chinese consumers. “Huawei’s shipments were higher than that of Apple in 2015 in mainland China. It is possible for this trend to continue in 2016. Apple’s focus is on the high-end market while Huawei covers both the low-end, mid-range and high-end market, which covers a wider base of consumers,” Tay said.
The report says smartphone makers will expand offline sales channels in 2016 as online flash sales no longer contributed to strong growth in 2015.
Small smartphone makers may merge to face higher cost for expanding offline sales channels and declining market growth in China.
“IDC predicts that the maturing of China’s smartphone market will lead to a flat growth in 2016. Despite the economic slowdown, top players including Apple and Huawei will still show good performance as consumers continue to demand high-quality products,” Tay said.
(Top photo from Baidu Images)