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Smartphones from Oppo, Vivo Make Gains on the iPhone in China

Devices hit a sweet spot between price and functionality

February 10, 2017 | Mobile

eMarketer recently examined the results of new Kantar Worldpanel ComTech estimates suggesting a decline in market share for foreign smartphone manufacturers like Apple. And with the release of full-year 2016 estimates on smartphone shipments in China by International Data Corporation (IDC), there’s further evidence of the continued rise of local manufacturers Oppo and Vivo. The two firms appear to have found a winning combination of pricing and features, allowing them to beat out more established competitors like Apple and Xiaomi.

Top 5 Smartphone Brands in China, Ranked by Shipments, 2015 & 2016 (millions, % of total and % change)

According to IDC, iPhone manufacturer Apple’s market share in China fell to 9.6% in 2016, down from 13.6% a year earlier. Apple shipped 13.5 million fewer phones in 2016 than it did the previous year. At the same time, China-based smartphone manufacturer Oppo saw its market share more than double, climbing from 8.2% in 2015 to 16.8% last year. Oppo shipped 78.4 million smartphones in China in 2016, more than any other manufacturer. China-based device company Vivo did almost as well: Its market share jumped by more than 6 percentage points in 2016, and it shipped 69.2 million smartphones.

Smartphone Sales Growth in China, by Price, H1 2016 (% change vs. same period of prior year)

Even before the release of full-year 2016 results from IDC, other sources have tracked the rapid growth of these two homegrown manufacturers. According to Q3 2016 data from Counterpoint Technology Market Research, the shipment share in China for both Oppo and Vivo increased by more than 6 percentage points over Q3 2015.

What might explain the increasing popularity of Oppo and Vivo among smartphone buyers in China? The two companies have settled on a device strategy that combines functionality with an appealing “midrange” price point. In fact, smartphone sales in this midrange seem to be outpacing other categories. A GfK analysis of China’s smartphone sales growth by device price point in the first half 2016 found that the fastest-growing category was devices priced between RMB2,500 and RMB3,000 ($376 and $451).

Oppo and Vivo seem to have found a sweet spot between cheaper bare-bones smartphones and the high-end products offered by Apple, helping the manufacturers position themselves for further growth among China’s growing middle class.

Jeremy Kressmann

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