China Q1 Smartphone Shipments Up Slightly, but Apple Down 15%

May 5, 2017 by Paul Ausick

Smartphone shipments in China fell 20% sequentially in the first quarter of 2017, while rising by a modest 4% year over year. Shipments of Apple Inc.’s (NASDAQ: AAPL) iPhone dropped 15% year over year, and Samsung’s shipments fell by 60%.

The big winners were Chinese smartphone makers Oppo (up 81%), Vivo (up 60%) and Huawei (up 25%).

Year over year, Apple’s market share fell from 12.3% to 10.1% and Samsung’s share fell from 8.6% to 3.3%. Chinese manufacturer Xiaomi saw its share drop from 12.6% to 8%.

Huawei’s share rose from 16.4% to 19.7%, Oppo’s share rose from 10.1% to 17.5%, and Vivo’s share rose from 11.2% to 17.1%.

The data were reported Thursday by market research firm Counterpoint Research.

Research analyst Mengmeng Zhang said:

The mid-tier $100-$199 and $300-399 segments were fastest growing segments, mainly driven by Huawei, Oppo and vivo with strong offline plays. However, Apple has not been able to grow at the same pace in this segment which has capped its total-addressable-market to the 4000 rmb or $600+ wholesale segment. This is one of the key reasons that has put the brakes on Apple’s growth in China.

In its segment, though, Apple absolutely dominates in market share, with five of the top 10 selling models. Here’s Counterpoint Research’s ranking of the high-end market by smartphone model:

  1. Apple iPhone 7 Plus/128 GB: 26.9%
  2. Apple iPhone 7/128 GB: 18.3%
  3. Apple iPhone 7/32 GB: 16.7%
  4. Apple iPhone 7 Plus/32 GB: 9.6%
  5. Huawei Mate 9/128 GB: 6.1%
  6. Vivo X play 6: 4.2%
  7. Huawei Mate 9 Pro/64 GB: 3.4%
  8. Samsung S7 Edge: 3.4%
  9. Huawei Mate 9 Pro/128 GB: 2.7%
  10. Apple iPhone 6S Plus/32 GB: 2.7%

Mengmeng Zhang also commented on the high-end segment:

The premium segment $600+ or 4000 rmb remained flat annually but shrunk 33% sequentially. Apple’s share of this super-premium segment remains at 80%… . The 4000 rmb and above segment mostly peaks during the Apple iPhone launch quarter and shrinks for the rest of the year. This volatility is because of Apple and affects Apple, as competition in the premium space is still weak. Though we are seeing Huawei with its Mate 9 series and players such as vivo trying to make some movement in this segment to attract premium Android users.

Apple’s near-monopoly share of the high-end market limits the company’s ability to gain more share there. If Apple wants to grow in China, it appears that the Cupertino giant will have move down-market, something it has been reluctant to do so far.

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