Chinese smartphone users not swayed by minor device updates

20 Feb 2018

Preliminary data from IDC’s Quarterly Mobile Phone Tracker revealed that China’s smartphone market declined 15.7% year-over-year (YoY) in 2017Q4 and 4.9% for the whole of 2017.

“In 2017, the minor upgrades that Chinese smartphone companies made to their offerings were not enough to move consumers to splurge on new models, resulting in a general slowdown in the market. The smaller players continued to suffer as the top five players grew their market share. A key space to look out for in the coming year would be how the top smartphone companies seek to tickle the fancy of consumers through their >$200 products to drive consumer upgrades,” said Tay Xiaohan, research manager of IDC Asia/Pacific's client devices team.

In the >$600 premium segment, Apple continues to dominate the market with 85% share of overall shipments in 2017Q4. The surprise entry into this segment is Huawei with the success of its Mate 10 and Mate10 Pro series which helped Huawei grew its share to 8% of total shipment in the >$600 premium segment in 2017Q4 from 2% in the same period in 2016.

With Samsung's continued troubles in the China market, Huawei has successfully managed to break into the high-end Android vendor space, although price points of the flagship Huawei phones are carefully priced lower than the iPhone prices at launch.

Two local brands Oppo and Vivo have made their mark in the midrange segment. Overall the two experienced YoY decline due to the reduction in models geared to the low-end segment. In terms of revenue, OPPO ranked second to Apple and was above Huawei, while vivo follows at fourth place. Thus, while OPPO’s shipments may have declined, it is growing in terms of its overall revenue.

In a separate report, Strategy Analytics blames the dip in global smartphone shipments – estimated at 9% to 400 million in 2017Q4 - largely on China.

Calling it the biggest annual fall in smartphone history, Linda Sui, director at Strategy Analytics, explained that, “The shrinkage in global smartphone shipments was caused by a collapse in the huge China market, where demand fell 16% annually due to longer replacement rates, fewer operator subsidies and a general lack of wow models. However, on a full-year basis, global smartphone shipments grew 1% and topped an impressive 1.5 billion units for the first time ever.”

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