Domestic players dominated China’s smartphone market in the first quarter of 2018 with the top four brands — Huawei, Oppo, Vivo, and Xiaomi — accounting for more than 73% of total shipments, reports Canalys Analytics, a global technology market analyst firm.
While smartphone shipments in China suffered its biggest ever decline in Q1 2018, a bright spot was Xiaomi, which grew shipments by 37% to 12 million units, overtaking Apple to secure fourth place. Huawei, up by a modest 2%, also managed to grow shipments, according to Canalys Analytics.
As the only vendor in the top five that is focused on the sub-RMB1,000 (about US$160) price segment, Xiaomi owes close to 90% of its shipments to Redmi. But the vendor is struggling to shed its low-cost image, says Canalys Research analyst Hattie He.
“The launch of the Mi Mix 2S in Paris and the very recent Mi 6X in Wuhan are clear efforts by the company to change customers’ perception of the brand, especially in China, where Xiaomi needs to tempt those looking at Honor, Oppo or Vivo to buy its products,” He adds.
Canalys reports the Chinese market can expect to rebound in the second quarter as new smartphones will definitely entice people to upgrade. After successive falls in the last two quarters, China is expected to return to growth in Q2 as Oppo, Vivo, and Huawei launch new flagship devices, the firm reports.
“The inventory issues that Oppo and Vivo suffered in Q4 and Q1 are now behind them,” Jia explains. “New smartphones will definitely entice people to upgrade, but vendors are more careful of avoiding oversupply in the channel. China’s smartphone market may see a short period of stagnancy as vendors refocus on research and development, relying on new use cases to excite refreshes rather than spending heavily on the channel and marketing.”