Mobile Phones

Report: China’s smartphone market suffers first ever annual decline as shipments fall 4% in 2017

Xiaomi Mi Note 3

The world’s largest smartphone market, China, it suffered its first-ever annual decline, with shipments down by 4% from 2016 to 459 million units in 2017, Canalys reports.

The drop in overall yearly sales was heavily influenced by the Q4, when shipments plummeted by over 14% compared to Q4 2016.

Huawei tops home market, managing to ship 90 million handsets last year, followed by Oppo, Vivo, Apple, and Xiaomi. In Q4 Huawei sold 24 million units, Oppo managed 19 million sales, and vivo shipped 17 million phones.

Tha analysts at Canalys say Huawei’s Q4, its best ever quarter in China, has something to do with the company’s successful push into tier-three and tier-four cities.

Its Nova and Honor brands have gained market share from smaller vendors such as Meizu and Gionee. Honor in fact contributed more than half of Huawei’s shipments, and cannibalization between the two brands is a concern.

“The declining Chinese market will have a detrimental impact on those Chinese vendors that have been heavily relying on their home market,” said Canalys Research Analyst Hattie He. “It will affect their cashflow and profitability, limiting overseas expansion and bringing into question future survival.

The threat to vendors such as Gionee and Meizu is now closer than ever.” With Lenovo and ZTE refocusing on the Chinese market in 2018, competition will intensify among vendors outside the top five. “There is little room left for the smaller vendors,” said He. “The leading players will make aggressive plans to maintain or grow their market share. We can expect a major market shake-up in China in 2018.”


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