iPhone Market Share in China Ticks Lower as Local Players Mount Challenge - eMarketer

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iPhone Market Share in China Ticks Lower as Local Players Mount Challenge

More consumers opt for mid-priced devices

January 24, 2017 | Mobile

Apple faces an increasingly fierce challenge in China from local smartphone producers.

Smartphone Sales Share in Urban China, by OS, Nov 2015 & Nov 2016 (% of total)

According to data from Kantar Worldpanel ComTech, iPhones accounted for 19.9% of smartphones sold in urban areas of China for the three-month period ending November 2016. That was down from a 25.5% share recorded for the same time period a year earlier, a drop of 5.4 percentage points.

Android devices, meanwhile, have seen their share rise, increasing to 79.9% over the same time frame, up from 72.7% the year prior. Kantar noted that domestic original equipment manufacturers (OEMs) were gaining ground in China's cities, with Shenzen-based Huawei continuing to lead with 25% of sales during the three-month period. Local manufacturer Oppo also made a strong showing, with 12.9% of sales.

Local manufacturers have made continual strides against Apple and other multinational players like Samsung. According to data from the China Academy of Information and Communications Technology (CAICT), local manufacturers shipped 497.6 million smartphones last year, accounting for 88.9% of all mobile phone shipments.

There's no doubt that Apple retains the imprimatur of a luxury product for a significant part of China's population. But at the same time, domestic manufacturers have shed their reputation for focusing solely on entry-level, low-cost devices. Several have moved upmarket, providing consumers with better design and improved features to target a growing segment interested in mid-priced devices that Apple has historically ignored.

Domestic OEMs Oppo and Vivo are two companies that have appealed to this emerging market segment. Counterpoint Technology Market Research reported that Oppo made up 16.6% of smartphones shipped in China in Q3 2016, while Vivo was not far behind with 16.2%. Apple devices accounted for just 10.6% of shipments, behind not just Oppo and Vivo, but also China-based Xioami's 15.0%.

—Rahul Chadha

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