Chinese smartphone shipments suffered a steep decline in the first quarter, according to estimates from two separate research firms.
Canalys estimates that shipments had their biggest ever decline during the quarter, falling more than 21% year-on-year to 91 million units – the lowest sales since the fourth quarter of 2013.
Eight of the top 10 smartphone vendors recorded annual declines in shipments, with Gionee, Meizu and Samsung's sales shrinking to less than half of their sales figures from the same quarter a year ago, the company said.
Market leader Huawei recorded a modest growth rate of 2% to 24 million units, while second placed Oppo saw a decline of 10% to 18 million units and third ranked Vivo saw shipments decline 10% to 15 million units.
But Xiaomi managed to buck the trend with a shipment growth of 37% to 12 million units, overtaking Apple to take fourth place.
Canalys Research analyst Mo Jia said the results show that the Chinese smartphone market is increasingly becoming a four-horse race..
“The level of competition has forced every vendor to imitate the others’ product portfolios and go-to-market strategies,” he said.
“But the costs of marketing and channel management in a country as big as China are huge, and only vendors that have reached a certain size can cope. While Huawei, Oppo, Vivo and Xiaomi must contend with a shrinking Chinese market, they can take comfort from the fact that it will continue to consolidate, and that their size will help them last longer than other smaller players.”
Counterpoint: Chinesee smartphone market faced its steepest ever decline during the quarter
Meanwhile Counterpoint estimates that the Chinese smartphone market fell 8% year-on-year and 21% sequentially, with the top five brands capturing a record 82% of the market.
The company predicts that Xiaomi recorded 51% growth and increased its market share to 13.1%, but still placed Apple ahead with a market share of 14.3%.
The research firm's top three rankings mirror that of Canalys, with Huawei on top with a market share of 21.6%, followed by Oppo at 17.6% and Vivo at 15.5%.
Looking ahead, Canalys has predicted that the Chinese smartphone market will return to growth in the second quarter.
“The inventory issues that Oppo and Vivo suffered in Q4 and Q1 are now behind them. New smartphones will definitely entice people to upgrade, but vendors are more careful of avoiding oversupply in the channel,” Jia said.
“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.”
Exhibit 1: China Smartphone Market Share Q1 2018