China’s smartphone market imbalance: Huawei’s one-size-a-half OV Xiaomi Apple collective loss

On October 30, 2019, market research firm Canalys released its third-quarter market share report for the Chinese smartphone market, which showed that Q3 China’s smartphone market shipped 97.8 million units, up slightly from 97.6 million units in the previous quarter, but still down 3% from the same period last year.

As in the past, the top five in China’s smartphone market are Huawei, Vivo, OPPO, Xiaomi and Apple, but there is a more serious imbalance.

A happy family worry

On a specific basis, Huawei’s (including Glory brand) smartphone shipments reached 41.5 million units, up 66% year-on-year and a market share of 42.4% – a double-digit percentage of Huawei’s six consecutive quarters of year-on-year growth in China’s smartphone market, compared with 66% this time. is a shocking growth ratio.

In the midst of Huawei’s unique growth, several other top-ranked vendors have seen double-digit percentage declines of no less than 20%, namely:

Vivo shipped 17.5 million units with a market share of 17.9%, a decrease of 23% YoY;

OPPO shipments were 17 million units, with a market share of 17.4%, a 20% decrease from the same period last year;

Millet shipped 8.8 million units with a market share of 9%, a decrease of 33% YoY;

Apple shipped 5.1 million units, with a market share of 5.2%, down 28% year-on-year.

中国智能手机市场大失衡:华为一家独大 OV小米苹果集体失势

In terms of market share, first-place Huawei’s market share (42.4%) is close to the sum of second-place vivo, third-place OPPO and fourth-place Xiaomi (44.3%).

Notably, outside the top five, the combined market share of other smartphone makers fell to 8% this year from 11.3% a year earlier, with only 7.8 million units shipped. This also means that the top five shipments have reached 92%, the entire market Of Matthew effect has gone to extremes, other manufacturers of the market space is more and more forced, with the “purgatory model” to describe, has not been strong enough.

Of course, given that only Huawei, the first of the top five, has seen market share growth, and in fact the other four manufacturers are “victims” of Huawei’s share growth, the market space of other vendors has narrowed further, or because of Huawei’s rapid growth.

In other words, Huawei’s position as a single company is stronger in China’s smartphone market.

5G as a market variable

Commenting on Huawei’s performance, Nicole Peng, Vice President of Sport at Canalys, said:

Huawei has opened a huge gap with other manufacturers. Its share is 25% higher than the quarter’s runner-up vivo. Huawei’s dominance gives it enormous power to negotiate supply chain and increases its market share among channel partners.

Nicole Peng also focused on the impact of the arrival of 5G on China’s smartphone market share. He said Huawei has the ability to further consolidate its dominance over key components such as 5G chipsets, given its close relationship with operators in 5G network deployment and its ability to control key components such as 5G chipsets on local networks at the time of its launch, compared with local counterparts. Xiaomi puts a lot of pressure on them, and they find it hard to make any breakthroughs.

中国智能手机市场大失衡:华为一家独大 OV小米苹果集体失势

Speaking of the performance of vivo, OPPO and Xiaomi, Canalys analyst Louis LIu said:

Despite the continued introduction of new products, shipments of vivo, OPPO and xiaomi are still plummeting. As China’s major operators are aggressively promoting 5G pre-enrollment and offering adequate discounts and free 5G data subsidies, making more than 10 million users interested in switching to 5G, smaller providers want to use 5G to quickly increase market share.

In addition to The Ami OV, Apple maintained its position as the fifth-largest in The Chinese smartphone market, but also suffered a sharp decline.

Louis Liu says Apple is actually better prepared for more competition, and the iPhone 11 series has made a big picture increase, attracting enthusiasm from Chinese consumers, especially with the iPhone 11’s ultra-low starting prices and flexible channels helping Apple’s sales.

However, Louis Liu stressed that Apple also faces challenges, particularly as Chinese handset makers and operators are pushing for 5G marketing, and Apple is not still sounding, which could put it in a bad position.

One for every two sold?

In fact, the uneven development of China’s smartphone market in the third quarter of 2019 is a continuation and enhancement of its performance in the second quarter.

Huawei shipped 37.3 million units, up 31% from 28.5 million units a year earlier and 38.2% in market share, the highest market share of any manufacturer since the last eight years, according to Canalys’ Q2 2019 shipments report released on July 30. Record. At the same time, OPPO, vivo and xiaomi shipments fell by 18%, 19% and 20% year-on-year, respectively, and even Apple fell 14%.

中国智能手机市场大失衡:华为一家独大 OV小米苹果集体失势

As early as the second quarter of 2019, Huawei’s unique situation has been formed. Interestingly, on the day of the report’s release, Huawei also held a performance launch, at which a reporter from the South China Morning Post asked:

Huawei mobile phones are a big family, conscience will not hurt?

In response, Huawei Chairman Liang Hua said:

Smartphone business in the market is not necessarily Huawei’s pursuit, I think the future will not be a unique, it is important that the product can follow the needs of consumers. Consumers’ love of Huawei or glory phones, technology leadership, product experience may be better, this is a pressure, we also want to become a continuous driving force, we will use better products and services to return to consumers.

The rhetoric is full of humility, but behind it is Huawei’s continued attack on China’s smartphone market. By the third quarter, 42.4% of the market and 66% year-on-year growth had once again cemented Huawei’s position as a stand-alone company, not only making life worse for OV Xiaomi and Apple, but also squeezing the market space for companies outside the top five.

Still, it’s a long way from Huawei’s real ambitions – in March 2019, Yu Chengdong publicly announced at Huawei’s HiLInk Eco-Conference 2019 that one for every three sold in China is now a Huawei handset, and this year our goal is to have one for every two sold, meaning that China has a market share of more than 50%.

If this goal sounds like a bragging for Yu Chengdong in March, it is not far from being truly achieved in the current market dynamics.

Summarize

For Huawei, facing a U.S. crackdown that has made such a dazzling achievement in China’s smartphone market is a market compensation for its losses in overseas markets and a way for it to cement its position in the global smartphone market. But on another dimension, China’s smartphone market is showing such an unbalanced state of development, not health, for consumers’ brand diversification choice is not a good thing.

Another concern is that China’s commercial 5G landing is coming soon, and 5G is an important consideration for consumers to choose a mobile phone, and thus another potential variable in China’s smartphone market;

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