- According to the latest IDC Quarterly Mobile Phone Tracker, the smartphone market in China saw 19% YoY growth and 17% QoQ growth in Q416.
- OPPO, Huawei, and vivo lead other smartphone brands in China in 2016.
- There was a slowdown in the online channel in China.
The four Chinese vendors in the top five were the same in 2015, and their share grew from 46% in 2015 to 57% in 2016. This shows the growing local acceptance of Chinese vendors on home turf with improved product features and better marketing messages seen over the past year.
"Increased dependence on mobile apps has led to consumers to seek phone upgrades, thus helping drive the large growth in Q416. In lower tiered cities, there was a similar demand by consumers, which OPPO and vivo met by aggressively pushing mid-range smartphones in these cities," says Tay Xiaohan, Senior Market Analyst with IDC Asia/Pacific's Client Devices team.
2016 was the first time ever that Apple saw a YoY decline in China. Even though the new black iPhones caught the attention of consumers, the new launches did not create as much of a frenzy compared to the past. Despite the decline, IDC does not believe Chinese vendors have actually eaten away Apple's market share. Most Apple users are expected to be holding out for the new iPhone that will be launched this year, and that will help the brand see growth in 2017. Apple's 10-year anniversary iPhone will also likely attract some of the high-end Android users in China to convert to an iPhone.
A key trend that stood out in 2016 was the slowdown of the growth of the online channel in China. There is no single channel that is seeing exponential growth for smartphones, unlike in previous years. Most brands are now using a combination of channels to increase their shipments. Xiaomi, previously focused on online channels, has opened more Mi Home stores to drive offline growth. Apple has also been aggressive in increasing its offline retail presence. Some vendors outside the top five vendor list in 2016, e.g. Gionee, also saw good growth in 2016 due to its expansion in the offline channel in lower tiered cities. To differentiate itself from OPPO and vivo, which predominantly target a younger audience, Gionee has been targeting professionals and executives, and hence has found its niche.
IDC predictions for the China smartphone market in 2017 include:
• Top vendors will continue to take up a larger share of the market while smaller brands will begin consolidation. 360 stopped launching phones under the Dazen and Qiku brands in 2017, and this will happen for more brands in 2017.
• Chinese vendors will continue to focus on their international expansion plans. At present, Huawei is the most successful top-three Chinese vendor, with half of its shipments coming from markets outside China in Q416. IDC expects these vendors to increase their shipments in the international market, with India as a key target for these top Chinese vendors.
"Increased dependence on mobile apps has led to consumers to seek phone upgrades, thus helping drive the large growth in Q416. In lower tiered cities, there was a similar demand by consumers, which OPPO and vivo met by aggressively pushing mid-range smartphones in these cities," says Tay Xiaohan, Senior Market Analyst with IDC Asia/Pacific's Client Devices team.
2016 was the first time ever that Apple saw a YoY decline in China. Even though the new black iPhones caught the attention of consumers, the new launches did not create as much of a frenzy compared to the past. Despite the decline, IDC does not believe Chinese vendors have actually eaten away Apple's market share. Most Apple users are expected to be holding out for the new iPhone that will be launched this year, and that will help the brand see growth in 2017. Apple's 10-year anniversary iPhone will also likely attract some of the high-end Android users in China to convert to an iPhone.
A key trend that stood out in 2016 was the slowdown of the growth of the online channel in China. There is no single channel that is seeing exponential growth for smartphones, unlike in previous years. Most brands are now using a combination of channels to increase their shipments. Xiaomi, previously focused on online channels, has opened more Mi Home stores to drive offline growth. Apple has also been aggressive in increasing its offline retail presence. Some vendors outside the top five vendor list in 2016, e.g. Gionee, also saw good growth in 2016 due to its expansion in the offline channel in lower tiered cities. To differentiate itself from OPPO and vivo, which predominantly target a younger audience, Gionee has been targeting professionals and executives, and hence has found its niche.
IDC predictions for the China smartphone market in 2017 include:
• Top vendors will continue to take up a larger share of the market while smaller brands will begin consolidation. 360 stopped launching phones under the Dazen and Qiku brands in 2017, and this will happen for more brands in 2017.
• Chinese vendors will continue to focus on their international expansion plans. At present, Huawei is the most successful top-three Chinese vendor, with half of its shipments coming from markets outside China in Q416. IDC expects these vendors to increase their shipments in the international market, with India as a key target for these top Chinese vendors.
• Chinese vendors are starting to launch phones with dual cameras and curved screens. We expect that to be the norm for most flagships in 2017. Cameras will continue to be a key focus in the marketing messages by vendors especially given the strong selfie culture in China, as exemplified by the popularity of apps such as Meitu.
• Similarly, Chinese vendors will be aggressive with other new technologies such as flexible screens and augmented reality. In the past year, vendors such as Huawei, Xiaomi, and LeEco developed phones with dual cameras, thin bezels, and digital headphone connectors well before many overseas vendors did. Bold experimentation is likely, even if such technologies might not immediately lead to higher shipments.
• Data is preliminary and subject to change
• Numbers may not add up due to rounding
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