Sunday, 25 August 2019

China smartphone segment above expectations as Huawei focuses on home

By Total Telecom staff
Wednesday 07 August 19

IDC warns of challenges in Chinese smartphone market in near term, but sees promise from 5G

Smartphone shipments reached 98 million in China in the second quarter of this year, IDC reported, noting that the figure is higher than it had expected. Q2 shipments were down 6% on the same quarter last year, but the analyst firm had predicted a 9% contraction, it admitted. The market remains challenging…

Smartphone shipments reached 98 million in China in the second quarter of this year, IDC reported, noting that the figure is higher than it had expected.

Q2 shipments were down 6% on the same quarter last year, but the analyst firm had predicted a 9% contraction, it admitted.

The market remains challenging, but its performance was buoyed by local giant Huawei, which has channelled more focus on its domestic market in the wake of the issues it is facing overseas.

Huawei shipped 36.3 million devices in Q2, 7.8 million more than its shipped a year earlier, giving it a market share of 37%, up from 27.4%, IDC's figures show.

Its biggest challengers, Vivo and Oppo, both shipped just over 18 million smartphones, putting their respective market shares at 18.7% and 18.6%.

Xiaomi's shipments fell by 19% on last year to 11.7 million, while Apple is still holding on to its 6.7% market share, having shipped 6.6 million iPhones.

Huawei's overseas smartphone sales have struggled in recent months following its trade spat with the US. "But in the domestic market, the company leveraged its existing strengths to drive its local market share to a new high," IDC said, noting that it increased its presence in smaller cities, employing new agents and additional manpower. Its P30 and Honor 20 series devices also helped, it said.

"In only one and a half months, Huawei was able to further strengthen its position in China and grab market share from other players in China," said Will Wong, research manager for client devices at IDC Asia-Pacific.

"Its success was not only because it brought much of its overseas teams back to China to focus on local distribution, but also because of its strong brand image in the country," Wong said.

However, Wang Xi, research manager at IDC China, noted that the market's near-term outlook is challenged by inventory in the channel and customer handset replacement cycles. But there is a positive ahead.

"5G phones and services are finally hitting the market in 2H19. We expect more adoption next year as prices reach more mainstream price segments, thus being a welcome accelerator in an otherwise challenging market," he said.

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