Domestic smartphone brands continue to outshine Apple in China

BI Intelligence See Also A startup is making a $30 dollar smartphone in Africa THE RETAILER MOBILE WALLETS REPORT: How stores can benefit from developing their own digital payments apps iOS app users are spending more

This story was delivered to BI Intelligence Apps and Platforms Briefing subscribers. To learn more and subscribe, please click here.

International smartphones are struggling to appeal to Chinese consumers, according to data from IDC. In Q1 2017, four of the top five smartphone vendors by volume of shipments in China were local vendors.

And while device shipments of the two leading smartphone brands, Huawei and OPPO, grew 25.5% and 20%, respectively, Q1 shipments of the iPhone — the only international brand to place in the top five — fell 27% YoY. This could suggest that Apple's products are struggling to gain traction against local handset makers. 

The report doesn't bode well for Apple, which counts China as its second-largest market outside of the US. China's massive smartphone population, as well as its burgeoning middle class, presented a market ripe for the picking. However, the latest results mark the fifth consecutive YoY decline in iPhone shipments in China, IDC notes. Nevertheless, the company remains enthusiastic about the opportunity in China, Apple CEO Tim Cook said during Apple's Q1 2017 earnings call last week. Apple is likely hoping that the hype surrounding its 10th anniversary device will spur greater interest in the next iteration of iPhones.

The global smartphone market is expected to slow considerably over the next few years. Despite a record-setting holiday quarter, 2015 was likely the last year of double-digit growth for smartphone shipments.

Mature markets were at the heart of this year's deceleration. Adoption has reached new highs in key markets in the United States, Europe, and China. The pool of first-time buyers in these countries is shrinking rapidly, and sales are now primarily coming from phone upgrades.

Meanwhile, emerging markets will continue to see robust shipment growth. India and Indonesia, in particular, will help fuel a large share of the shipments growth within the global smartphone market over the next few years.

BI Intelligence, Business Insider's premium research service, has compiled a detailed report on smartphones by country that forecasts the market through 2021 to reflect slower, stabilizing growth in the long term.

Here are some key points from the report:

The global smartphone market is still growing at a steady pace due to more widespread adoption in emerging markets. We estimate the global market will hit about 2.1 billion units shipped in 2021.

Shipments growth over the past few years has been driven by the falling price of smartphones, which has made handsets more accessible in emerging markets. The average selling price of a smartphone in India nearly halved between 2010 and 2015.

With relatively low smartphone penetration, we forecast Indian smartphone shipments to grow rapidly over the next five years. Nevertheless, India has a long way to go before it surpasses China as the world's leading market for smart handsets. India is estimated to account for roughly 10% of the global smartphone market in 2016, considerably less than China's 30% share.

The global platform wars are over, even as smartphone adoption continues to rise across various markets worldwide. Android and iOS are estimated to account for 97.3% of global platform market share in 2015, compared to 96.3% last year.

Apple closed the year with another strong quarter on the back of its iPhone 6s and iPhone 6s Plus launches. Still, the vendor saw a slight decline in YoY growth of its share of the market in the face of stiff competition from Samsung and Chinese vendors such as Huawei.

In full, the report:

Forecasts global smartphone shipments through 2021.

Explores why India is the next high-growth smartphone market.

Breaks down the global smartphone platform wars.

Discusses smartphone vendor performance market share.

To get your copy of this invaluable guide, choose one of these options:

Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP

Purchase the report and download it immediately from our research store. >> BUY THE REPORT

The choice is yours. But however you decide to acquire this report, you've given yourself a powerful advantage in your understanding of the smartphone market.

EXCLUSIVE FREE REPORT: 25 Big Tech Predictions by BI Intelligence.Get the Report Now »
Source: Domestic smartphone brands continue to outshine Apple in China