Chinese smartphone makers conquer world markets

Huawei, OPPO, VIVO, Lenovo, and Xiaomi are the top five Chinese brands by volume of units – some are growing at unprecedented rates at the expense of traditional brands like Apple and Samsung.

Huawei has seen a 10.2% year-on-year (YoY) growth and will produce 119 million smartphones in 2016. But that pales into relative insignificance when you look at number two – OPPO with a 59.2% growth to 78M handsets and its sibling VIVO with a 40.4% growth to 66M handsets. Combined OPPO/VIVO will produce 144M!

Lenovo, however, suffered a 15.7% drop to 59.01M and Xiaomi a 13.2% drop to 59M units. That left a plethora of smaller makers – about 300 - taking the remainder (213.63M) handsets to see China sell 594.640M in 2016.

These are certainly telephone numbers - 594,640,000 and growing fast – and they are all Android!

That is according to Trendforce, a company that is surprising many 'research' companies with its uncanny accuracy and estimate ability.

While statistics can tell many stories, it points to smaller companies like LEco with a 300% growth (base unknown) and of the opportunities for 'home grown' as Apple's gloss disappears from China's 1.4 billion people.

Apple held 11% of the Chinese market in Q1 and Samsung 9% and while Samsung is expected to retain market share Apple is not. Smartphone 'imports" to China fell to 104.9M – down 5% Y-o-Y.

Interestingly however Bloomberg has predicted a massive shakeout in the smaller players with as many as 150 of them disappearing as market saturation is reached. It will be a case of the "big get bigger".

Trendforce says the sales of the Huawei's newest flagship, P9, were not as robust as expected during the first half of 2016, even though it features a Leica-certified dual camera. Conversely, OPPO and VIVO have been well-received by consumers because of their sleek surface designs and fast-charging capability. The production volumes of both OPPO and VIVO smartphones are expected to keep rising through the year. OPPO is also driven by an international market push – for example, it has opened in Australia where it is now one of the top-selling brands via JB Hi-Fi and Optus.

Trendforce also commented on Taiwanese manufacturers. ASUS has made significant strides since it entered the market three years ago with high cost-performance offerings. It is currently the Taiwanese leader, and its production volume for 2016 is projected to hit 21.5M, up 34% from the 2015's figure of 16M.

HTC has dramatically shifted its product development focus to VR headsets. HTC's latest flagship is only expected to sell 1M units in 2016. To survive it has released a mass-market version and taken on additional smartphone production for Nexus phones from Google. However, its overall production will amount to only 13M  units, down 27% from last year's 18M. Current analysis indicates that a smartphone maker of this ilk must achieve the minimum production volume of 40 million units to remain viable.

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