The rise of Chinese smartphones in the world's market

Oppo, Vivo and Huawei capture almost half of Chinese smartphone market

Mumbai: Despite global slowdown, China's highly competitive smartphone market grew a healthy 6% annually in 2016 against 2% in 2015 with Oppo, Vivo and Huawei capturing almost half of the market, a Counterpoint study said Friday.

“The Chinese smartphone market saw a continuous rise in shipments as original equipment manufacturers (OEMs) also began to fill channels ahead of the Chinese New Year season," James Yan, research director, Counterpoint, said in a statement.

“The final quarter of the year was marked with series of flagship upgrades from key brands such as Apple, Oppo, Huawei, Xiaomi which catalyzed the smartphone demand in China, healthier than last year," Yan added.

In the quarter ending December 2016, the demand for smartphones in China remained healthy as the smartphone shipments were up 12% annually and 9% sequentially driving the full year growth and record volumes. Overall smartphone shipments in 2016 was 3% over 2015, while it was flat in 2015 against 2014.

The study pointed out that Oppo, Huawei, Vivo, Meizu and Gionee drove the majority of the volume, capturing a combined 58% of the total Chinese smartphone market in 2016 while demand for last year's star performers Xiaomi and Apple remained low, suggesting that only five brands -- Oppo, vivo, Gionee, Huawei and Meizu -- registered healthy growth during the full year 2016.

In the quarter ending December 2016, Oppo held the highest smartphone shipments market share at 18.3%, up from 9.4% same period last year, followed by Huawei at 17.1% and vivo at 14.5%.

The study appropriated Oppo's and vivo's growth to "strong omnipresent distribution channels from tier-1 to tier-4 cities across China, aggressive above and below the line marketing, effective retail-level promotions for both trade and consumers and effective positioning with focus on key features such as camera, battery life and audio within their smartphones."

For the full year 2016, Huawei held the highest market share of 16.4% backed by affordable Honor smartphones and a healthy demand for flagship P and Mate series. "Huawei has gained a foothold in the premium market with the successful release of P9 and Mate 8 and will continue to put more emphasis in the premium market going forward challenging Apple," Tarun Pathak, associate director, Counterpoint, said.

Pathak added that in 2017, Huawei will also benefit of its offline channel expansion strategy started in late 2015 to cover 1,000 provinces by the end of the year.

In the quarter ending December 2016, Xiaomi's market share declined to 9.9% from 15.5% on a like to like basis. "The key reason for Xiaomi's decline was its rivals racing ahead with key features, innovation, bigger marketing budgets and wider online and offline distribution channel during the year," research analyst at Counterpoint, MengMeng Zhang, said.

The study suggested that most of the demand for Xiaomi remained across its cheaper sub US$150 Redmi series models. It also said that Xiaomi’s online sales model has been hitting a ceiling. "Xiaomi is looking to expand its offline presence by opening more than 200 Mi Home Stores in 2017 on top of the 54 Mi Home Stores currently. However, we believe that this pace will not be of much help in boosting Xiaomi’s offline presence in 2017," Zhang added.

US-giant Apple also saw a decrease in its market share from 14.9% to 12.2% in the quarter ending December 2016. Apple, with slowing traction for its flagship iPhone 6S, during the year saw a fall of 21% which was somewhat offset by relatively healthy demand for the newer flagship iPhone 7 series in Q4 2016. "Apple still remains in a vulnerable position and there is higher expectation already with the next year flagship which is rumored to be substantial upgrade from both design and components perspective," said Zhang.

Oppo R9 was the bestselling smartphone model of 2016 in China holding a market share of 4%, followed by Apple iPhone 6S and Huawei Honor Joy 5S at 2% each. The study said the while the smartphone user base is at an all-time-high and maturing, bulk of the popular models are still skewed towards mid-end which outs a cap on growth for players such as Apple.

The study suggested that Apple with iPhone 7 and 6s and Huawei with Mate 8 and P9 dominated the premium segment market. While Oppo and vivo dominated the high-end market, mid-tier was dominated by Xiaomi and Oppo. "LeEco Le 2 and Meizu Note 3 were the key models which drove volumes for these brands respectively in 2016," Neil Shah, research director, Counterpoint said.

"More than 500 smartphone models were active during the year contributing meaningfully to the overall volumes. However, only the top 20 models contributed to roughly a third of the total market share," Shah added.

The report highlighted that Chinese e-commerce players such as Alibaba helped the growth story of the smartphone market with 11.11 sale during the fourth quarter breaking all the records compared to last year. The study added that in terms of features, key focus remained on proliferation of smartphones with fingerprint sensors, 4G+/VoLTE ready, fast-charging, OLED displays, battery. adoption of dual-rear-cameras and higher megapixel front-camera for selfies.

Telecom

The Samsung Galaxy S8 and iPhone 8 may NOT be 2017's biggest smartphones, and this is why

2017 promises to be a huge year for the smartphone market, as big-name devices such as the Samsung Galaxy S8 and the iPhone 8 are set to be revealed to the world.

Promising major updates in terms of hardware power, camera capability and interactivity, these new devices will doubtlessly grab many of the headlines, but what if you want something a little different?

A growing number of Chinese firms are making inroads into the global phone market, and it’s fair to say that Apple and Samsung might be getting worried.

So as Chinese New Year approaches and billions across the world get ready to celebrate the start of the Year of the Rooster, what does 2017 have in store for the country’s phone makers?

With Apple’s iPhone and Samsung’s Galaxy devices often hogging the media limelight (for better or worse) across Western markets, it may come as a surprise to many to know that these devices are often nowhere near the most popular brands in some other countries.

China, which only allowed Apple to start selling iPhones in the country in 2014, has instead encouraged its own domestic brands, leading to a completely different landscape to that seen in the UK or USA.

The likes of Huawei, Oppo and Xiaomi may be little known in the West (for now at least), but in a country of over a billion people, such brands have jumped at the chance to exploit a customer base numbering in the hundreds of millions.

These brands manufacture and sell high-end Android phones at a fraction of the price of a new iPhone, with Oppo’s flagship F1 phone retailing for just $249 (£160) compared to the $649 you’d need to pay for the most basic iPhone 7 model.

This is thanks to their use of local components and huge advertising, making them the power players in the huge Chinese marketplace.

Recent figures from analyst firm Strategy Analytics show that Huawei, probably the best-known Chinese brand in the West, overtook Samsung to become the world’s most profitable Android device maker in the last quarter of 2016.

Granted, Samsung was suffering the effects of the Galaxy Note 7 recall, and the table was still topped by Apple, but the figures show that these new players are hungry to expand.

Speaking of the Galaxy Note 7, it’s worth noting what damage that has done to Samsung’s brand - with the phone itself being turned into a punchline, how many Android customers will now seek an alternative make of phone when upgrading next?

With Samsung now unlikely to launch a new flagship device until the Samsung Galaxy S8 arrives in March, that means another quarter will go by with these growing Eastern firms continuing to steal away market share.

As well as providing a welcome alternative from the likes of Apple and Samsung, these other brands are also able to provide hugely powerful and feature-packed smartphones for a fraction of the price.

Take OnePlus, which has gained huge popularity for a number of its most recent handsets, including the OnePlus 3, which Express.co.uk said was, “a phenomenal achievement”, offering huge power and a brilliant camera for just £329, far less than the latest iPhone or Galaxy device.

The company’s devices regularly sell out in Western markets, helped by canny advertising and network partnerships, helping drive up demand and public attention.

Many of these Chinese phone makers will be launching new devices at Mobile World Congress in Barcelona next month, allowing them to grab more media attention, and therefore more consumer awareness.

The power of marketing in the hyper-competitive smartphone market cannot be denied, and several Chinese firms have already tried to show off their goods in a big way.

Huawei currently has partnerships with many leading European football clubs, including Arsenal, Paris St Germain, AC Milan and Borussia Dortmund.

Adverts for the likes of Oppo and Vivo, whose phones retail at the fraction of the price of Apple and Samsung, are also becoming commonplace at televised sporting games, especially those which are broadcast back in China.

Vivo phones even made an appearance in last year’s biggest superhero movie, with a branded concept Vivo device ending up in the hands of Robert Downey Junior’s Iron Man in the blockbuster Avengers: Civil War - a film seen by millions worldwide.

The obvious product placement was greeted with incredulity by many observers in Western markets, but was a clear sign that increased marketing budgets are having an effect.

So what does this means for the UK market being saturated by alternative Android phones?

In the long run, of course, competition is always a good thing, and as more brands strive for supremacy, this should only mean lower prices for many of us.

If you head to any high street phone store, the number of phones from Chinese brands is growing steadily. As more of more customers clamour for something different to the most popular devices, this is only likely to keep growing.

So keep this in mind next time you’re looking to upgrade your phone - the ideal solution could well be coming not from Apple or Samsung, but from China.

Sunday Express

Hi everyone, today on InnovaTech Review, we will talk about smartphones, especially the Chinese ones. Why ? Because during the last few years, brands like Huawei, Oppo or OnePlus have shown that they could compete with the giants Apple and Samsung.

The first article shows us an overview of the state of the Chinese smartphone's market.

The second one explains that this year will certainly be really interesting because of the challenge between IPhone 8, Samsung Galaxy S8 and the Chinese "newcomers".

To begin with, the Chinese market is highly competitive and shows a continuous growth since the last few years. Brands like Huawei or Vivo score some points thanks to their lower prices (Oppo’s flagship F1 is $249 whereas Apple's IPhone 7 is $649) and high quality smartphones, and this leads to an eviction of Apple's leadership.

Moreover, these brands start to spread more and more in the rest of the world (I personnaly have a Huawei Phone) because they are more affordable. Samsung who is still facing the "disaster" of the Galaxy Note is even losing its place to the advantage of Huawei.

That's all for this week guys, see you next Sunday on InnovaTech Review for a new article !

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