Chinese Brands Are Shaking Up The $420B Smartphone Market

Smartphones are a ubiquitous part of modern life, and now nearly half of humanity is connected through such devices.

As a result, the stakes have never been higher in the ultra-competitive smartphone market. Every day, companies are duking it out for any sliver they can get of global smartphone sales, which now exceed $420 billion per year.

In rapidly growing markets like China and India, the competitive environments are even more interesting. Due to rising socioeconomic circumstances and falling price points on certain models, large segments of these populations are able to purchase these devices for the first time.

These big markets are in a constant state of flux – and it's not unusual to see top competition to get unseated.

THE CHINESE SMARTPHONE MARKET

In the most recent quarter, Chinese smartphone shipments grew a staggering 18.7% to 135.7 million:

This rapid increase in sales comes at a time when domestic brands in China are starting to aggressively market their products.

Oppo, a brand mostly unknown across the Pacific Ocean, has more than tripled market share over the last year to unseat the incumbent Huawei. This marks the first time that Oppo has been the most popular brand in the country.

Oppo has adopted a simple but effective strategy, going after the offline market which still contributes more than 70% of total sales in China. Aggressive marketing, promotions and sponsorships, greater offline retail penetration beyond tier-2 and tier-3 cities, better retail margins, dealer support and above all head-turning, innovative smartphone designs has helped Oppo drive its sales in the last eighteen months.

– Neil Shah, Counterpoint Research

IPHONE SALES DIP

Apple (AAPL) fell in the rankings, as consumers wait for the release of the 10th anniversary iPhone. Notably, this year-over-year decline was the first for Apple since entering the Chinese market.

Because domestic companies have greater access to manufacturers, they are beginning to roll out new features (e.g. augmented reality, flexible screens) to compete with brands like Samsung and Apple in ways never seen before. Domestic Chinese brands are generating excitement for their products and that is translating into triple-digit growth numbers for companies like Oppo and Vivo.

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Source: Chinese Brands Are Shaking Up The $420B Smartphone Market