China smartphone market shrank for first time in 2017

26 Jan 2018

China's smartphone market suffered its first ever annual decline in shipments during 2017, marking an end to the unparalleled growth story of the world's largest smartphone market, research from Canalys indicates.

Total shipments fell 4% during the year to 459 million units, with shipments in the fourth quarter sinking by a particularly steep 14% to just under 113 million units, the research firm said.

First-ranked Huawei managed to buck the trend by recording a 9% increase in shipments in Q4 to 24 million, marking its best-ever quarter in its home market. The vendor's total shipments for the year reached 90 million.

Fellow home-grown smartphone brands Oppo and Vivo both saw declines in shipments during the fourth quarter, of 16% and 7% respectively, but held on to their second and third place positions and managed to record double-digit annual growth for 2017. Apple meanwhile overtook Xiaomi to take fourth place in Q4.

“The declining Chinese market will have a detrimental impact on those Chinese vendors that have been heavily relying on their home market, Canalys research analyst Hattie He commented.

“It will affect their cashflow and profitability, limiting overseas expansion and bringing into question future survival. The threat to vendors such as Gionee and Meizu is now closer than ever.”

The competitive landscape is also expected to intensify in 2018, with Lenovo and ZTE both planning to refocus on their home market this year, He added. This will leave little room left for the smaller vendors, which could set the stage for a major market shake-up during the year.

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