Monday, June 12, 2017

Huawei still dominate the Chinese Market, increasing 25% on their smartphone shipments in the 1Q of 2017.

  Huawei, the world's No.3 leading smartphone maker, maintained its dominance in the Chinese market with year-over- year growth of 25.5% thanks to the brand’s stronghold in the mid-tier and high-end segments: it has consolidated its position in the premium market with offerings including the P-series and Mate-series. The IDC report shows the Honor sub-brand also delivered strong results in the middle market, with market share posting double-digit growth.

 The first half of the year will see a flat trend and growth will pick up in the second half. IDC believes cyclical changes led to the slowdown in China’s smartphone market in the first quarter.

  Firstly, the overall market saw weakness in the quarter due to cyclicality, with the Spring Festival holiday season prompting a stagnation of shipments across channels. Secondly, as phone makers increased shipments in the fourth quarter of last year, pushing inventory to a higher level, in the

  first quarter they were actively cutting capacity and consequentially reduced new model launches.

To clear inventory for upcoming Spring/Summer new product releases, vendors will digest existing

models. Despite this, consumer demand for smartphones remains strong, especially for upgraded devices.

  Against the backdrop of a slowdown in the smartphone market, the competitive landscape has seen competition intensify as consumers are showing robust demand for smartphones, especially for upgraded devices. To meet consumer demand, manufacturers are maintaining a rapid pace of product iterations and upgrades, continuing to step up marketing efforts, which are mainly reflected in the following aspects:

Chinese vendors are striving to disrupt the extant competitive landscape in the higher-end segment.

  • Rapid expansion of offline experience stores is now a key battleground. In the past year, top Chinese phone brands have paid more attention to offline channel expansion and been planning the construction of experience stores.

  • Looking into 2017, Chinese smartphone manufacturers must focus on building their capacities in the midrange to high-end segments in order to consolidate their advantages.

  IDC believes that as users pay more attention to brand experience, smartphone experience store should be more focused on how to build close relationships between brands and their consumers and provide a variety of experience-based services.

  The performance of phone makers throughout 2017 could reshape the landscape of the smartphone market. But perhaps this market structure will remain unchanged until the next disruptive innovation comes.

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