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China’s Smartphone Market Hit by Decline in Sales

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Smartphone sales in China saw biggest decline ever in the first quarter of 2018, according to a new report from research firm Canalys.

The smartphone shipments dropped to 91 million units during the quarter ended on March 31, a decline of 21 percent over the same period in the previous year.

80 percent of manufactures recorded drop in shipments in China, world’s biggest smartphone market.

Xiamoi and Huawei were the only two vendors to experience growth in sales.

Xiaomi sold 12 million units to record an increase of 37 percent. Huawei consolidated its market leadership by selling out over 21 million units and claiming a share of 24 percent.

Samsung managed to sale only 2 million devices in Q1, a decline of 50 percent over the same period in 2017.

Oppo and Vivo both recorded a decline of 10 percent, having sold 18 million and 15 million smartphone units respectively.

The smartphone shipments in China dropped to 91 million units during the quarter ended on March 31, a decline of 21 percent over the same period in 2017

 

Huawei, Oppo, Vivo and Xiaomi together claimed a market share of 73 percent in first quarter of this year.

“The level of competition has forced every vendor to imitate the others’ product portfolios and go-to-market strategies. But 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,” Canalys Research analyst Mo Jia said.

“While Huawei, Oppo, Vivo and Xiaomi must contend with a shrinking Chinese market, they can take comfort from the fact that it will continue to consolidate, and that their size will help them last longer than other smaller players.”

Apple dropped two spots to sixth place in the Chinese smartphone market. The research firm Canalys did not reveal how many iPhones the California-based company sold in the country, but said it saw a “significant decline” in shipments from Q4 of 2017.

“Apple has a strong image, but their product and innovation is restricted to the very high-priced iPhone X … most Chinese cannot afford that price so they switch to Huawei or Oppo,” said Jia.

The research firm predicts that the Chinese smartphone market will return to growth in the second quarter, when Vivo and Huawei and will launch their new flagship phones.

“China’s smartphone market may see a short period of stagnancy as vendors refocus on research and development, relying on new use cases to excite refreshes rather than spending heavily on the channel and marketing,” Jia added.