There is a huge decline in the cellphone sale in China in the first quarter of 2018. According to the report published by independent analyst company, Canalys, China saw a 21 percent decline annually to 91 million units, with eight of the top 10 vendors experiencing a fall in sales.
Apple was displaced from its number four spot by the local brand Xiaomi. Xiaomi also saw the biggest growth in its shipments, a growth of 37 percent to 12 million units sold. At the top spot is Huwaei (and its brand Honor) which also managed to grow shipments by 2 percent.
According to the report the Chinese market is being dominated by Huawei, Oppo, Vivo, and Xiaomi which are local brands. The companies accounted for more than 73 percent of total shipments in China for the first quarter. Outside the top five companies, there was a decline of 19 percent in market share in the recent quarter, the report said.
“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,” said Mo Jia, an analyst at Canalys.
“While Huawei, Oppo, Vivo, and Xiaomi must contend with a shrinking market, they can take comfort from the fact that it will continue to consolidate,” he added.
Canalys analyst Hattie He said “Xiaomi is the only vendor in the top-5 that is focused on the sub-RMB1,000 (about $160) price segment and it owes close to 90 percent of its shipments to Redmi,” in reference to the company’s line of budget smartphones.
The report also mentioned an expected growth in the upcoming quarter, with Oppo, Vivo, and Huawei expected to launch new flagship devices. According to Mo Jia the inventory-related issue faced by Oppo and Vivo have been solved by now.
“New smartphones will definitely entice people to upgrade, but vendors are more careful of avoiding oversupply in the channel,” he said, adding that the market could see “a short period of stagnancy” as players refocused on research and development efforts instead of marketing products.