The Chinese smartphone market has seen a drastic shift in recent years. According to research firm Canalys, smartphone shipments in China fell 4% year-over-year to 84 million in the fourth quarter of 2020, with shipments for the year overall dropping 11% from the previous year to 330 million. Apple’s share of the market experienced an increase, jumping from 15% to 18% year-over-year.
This has had significant implications for the smartphone market in China, and in this article, we will explore how it has changed and what factors are contributing to this shift.
Overview of the Chinese smartphone market
The Chinese smartphone market has been heavily impacted by the global pandemic, with phone shipments in the country falling 4% year-over-year (YoY) to 84 million units in Q4 of 2020, according to research firm Canalys. For 2020, smartphone shipments fell 11% YoY to 330 million units. The biggest shift has been within Apple’s iPhone lineup – its share of shipments rose from 15% to 18% YoY.
The decline in China’s smartphone market has been slower compared to other parts of the world – such as Europe and the US – but that doesn’t mean there isn’t effect on competing OEMs such as Huawei and Oppo who both have significant market shares in their native country. Their competition has seen a much bigger hit than Apple. Huawei saw its Chinese market share drop from 38% YoY to 28%, while Oppo dropped from 23% to 17%.
Overseas markets have driven a lot of growth for brands like Huawei and Oppo; however, due to rising tensions with the US and the war on top Chinese apps led by Washington DC, those markets may no longer be accessible to these brands.
That said, in 2019 WeChat overtook Alipay as China’s most popular mobile payments platform. Mobile banking services continue to grow stronger daily with legacy banks unlocking new systems and technologies for faster transactions at scale via mobile devices. As concerns of privacy also appear more prominently on consumers’ minds, domestic OEMs are also vying for a greater share of smart home devices sales across medium-to-high end products like AI speakers or augmented reality glasses for example, which could create new opportunities for their phones over time.
Canalys: smartphone shipments in China fell 4% YoY to 84M in Q4 2020 and shipments for 2020 fell 11% YoY to 330M, as iPhone’s share jumped from 15% to 18% YoY (Catherine Shu/TechCrunch)
According to the market research firm Canalys, smartphone shipments in China declined 4% year-over-year (YoY) to 84 million units in the fourth quarter of 2020. Moreover, shipments for 2020 fell 11% YoY to 330 million units.
The decline of the Chinese smartphone market has been attributed to the coronavirus pandemic and other factors, such as stiffer competition. However, on the bright side, Apple increased its market share in the country, jumping from 15% to 18% YoY.
Canalys report on Q4 2020 shipments
Canalys recently released its report on smartphone shipments in China in the fourth quarter of 2020. The report revealed that shipments totaled 84 million units, representing a 4% year-over-year decrease. In addition, total shipments for 2020 fell 11% year-over-year to 330 million units.
The report also noted that Apple’s market share in China jumped from 15% to 18% year-over-year during the fourth quarter due to strong demand for its iPhone 12 series and iPhone SE (2020). The strong demand allowed Apple to reach its highest share of the Chinese market since 2014, underscoring its successful “supercycle” momentum.
Regarding other smartphone brands, Huawei remained the leader with a 29% market share in Q4 but experienced a significant annualized decline of 20%. Other Chinese vendors Oppo and Vivo experienced similar downward shifts and saw their combined market share fall from 51% for 2019 to 43% for 2020. Samsung was the only brand out of the top five vendors that was able to maintain or increase its market share from 2019 to 2020, as it held approximately 10%. In fact, Xiaomi’s market share fell from 15.2 percent at Q4 2019 to 13.0 percent at Q4 2020 even though it recovered slightly from lower shipment volumes in H2 2020 due to Covid19 disruptions.
Overall, domestic brands dominate 69 % of the Chinese smartphone market despite the weakening performance of all domestic leaders except Samsung in Q42020.
Canalys report on 2020 shipments
According to the latest report from Canalys, smartphone shipments in China for the final quarter of 2020 dropped 4% year-on-year (YoY) to 84 million units, despite a better performance than analysts’ predicted decline of 6%-8%.
The Chinese smartphone market dipped 11% YoY for the full year to 330 million units due to Covid-19 suppressing consumer demand. However, the Chinese market has been recovering slowly since its sharp slump in Q2 2020.
However, Apple was one standout winner in the dip and shipped 45 million iPhones during 2020, a YoY increase of 16%. The surge in sales aided Apple’s share of the Chinese smartphone market in 2020 increasing from 15% to 18%. This was largely driven by demand for its new ‘iPhone12’ product line, especially in tier 1 cities like Beijing and Shanghai, where nearly one-third of models were purchased.
Huawei remained leader with 33% share and shipments grew 20% YoY from Q4 2019 reflecting its success at driving 5G adoption during a difficult year. In contrast Xiaomi suffered an annual decline of 2%. OPPO followed with just over 12%, while Vivo rounded out the top five with 11%.
Analysis of the Data
According to a report released by Canalys, smartphone shipments in China fell by 4% year-on-year (YoY) to 84 million units in the fourth quarter of 2020, while shipments for 2020 fell by 11% YoY to 330 million units.
As a result, the iPhone’s share of the Chinese smartphone market jumped from 15% to 18% YoY.
Let’s take a closer look at the data and explore its implications.
Factors driving the decline in shipments
According to Canalys, the decline in smartphone shipments in China in Q4 2020 and for the entire 2020 year was due to several factors including the economic pressure of Covid-19 and a decrease in consumer spending.
Additionally, global semiconductor shortages have curbed phone demand, putting a strain on manufacturers. This has made it harder for companies to produce or acquire parts necessary for manufacturing phones.
Further, new regulations from Chinese government has hampered 5G phone sales but driving interest around 5G technology may help this market in the long run. Apple’s iPhone 12 series saw major successes due to its attractive 5G capabilities that increased their market share.
Consumer preferences have also played a role in shipment decline as customers increasingly prefer mid-tier devices over more expensive ones due to stretched budgets and shifting economic circumstances.
Impact of the iPhone on the market
The release of the iPhone in the Chinese smartphone market has significantly impacted the market landscape. According to Canalys reports, iPhone shipments in China rose 4% annually to 84 million during Q4 2020 and shipments for 2020 rose 11% annually to 330 million. This has dramatically increased Apple’s market share, jumping from 15% to 18% year-on-year (YoY).
Canalys analyst ping shiang noted that “this was largely because of the launch of the iPhone 12 across multiple channel partners”. As a result, apple captured almost two-thirds of the 4G premium phone segment, partly due to increased shipments from factors such as demand for upgraders and 5G enablement. Furthermore, Apple significantly grew its footprint across China by focusing on both urban and rural areas.
Apple’s increase in market share is highly significant for the smartphone industry given China’s position as one of the largest markets globally for smartphones. As such, it could have ripple effects throughout other global markets. Overall, these trends demonstrate how important iPhones have become in global phone sales and how powerful their presence is despite the challenges presented by competitors like Huawei and Samsung.
Implications
According to research from Canalys, the smartphone market in China experienced a 4% year-over-year decrease in shipments in the fourth quarter of 2020 and an 11% decrease in shipments for the full year of 2020. Additionally, the iPhone’s share of the market in China jumped from 15% to 18% in the same period.
In this article, we will discuss some of these figures’ implications.
Impact on the global smartphone market
The news about China’s smartphone sales for Q4 2020 and 2020 is particularly important to international markets. Despite recording a four percent decrease in shipments from the previous year, China nonetheless recorded an 11% decline in shipments between 2019 and 2020. This has important implications for the global market as the world’s largest consumer of smartphones by far.
Analysts point to several major ripple effects seen across different parts of the global market. However, the primary concern is that as Chinese smartphone companies struggle to balance the demand in their home market against economic challenges caused by the pandemic, they will have trouble sizing up effectively against international competition – especially those who have access to larger production budgets (such as Apple and Samsung).
This could lead to fewer smartphone releases from Chinese companies, which would have repercussions domestically (there would be fewer models available for customers at home) and globally (manufacturers may have difficulty competing against rivals due to fewer choices). Additionally, though Apple saw its share increase from 15-18%, many analysts still expect Huawei to continue holding onto its spot at number one over the next few years thanks to aggressive marketing strategies within China.
Overall, these figures reveal much about what lies ahead for both domestic and international players in the Chinese market on a global platform. With competition becoming increasingly fierce, manufacturers must focus on product differentiation and providing higher value-for-money propositions if they hope to succeed over their rivals – especially when launching new products internationally.
Implications for Chinese competitors
The current state of the smartphone market in China has profound implications for local competitors. Canalys’ findings show that despite a 4% YoY decrease in smartphone shipments for Q4 2020, the iPhone’s share jumped from 15% to 18%. This suggests that Apple is continuing to chip away at the market share of Chinese rivals, including Huawei, vivo, OPPO, and Xiaomi.
The struggles of Chinese vendors will most likely intensify as Apple further expands its presence in China. The company has been making tremendous progress in its foray into the country, forging deals with China’s major OEMs such as Foxconn and others to manufacture and assemble its iPhones locally.
Local vendors must increase their focus on innovation and differentiation to remain competitive. This includes formulating better strategies for adopting new technologies such as 5G or expanding into other categories such as smart home devices and wearables. In addition, Chinese smartphone makers must also prioritize developing services which would improve user experience, monetize their services via software subscriptions or advertising fees more effectively.
Moreover, Chinese smartphone makers may also need to consider revising their strategies when it comes to pricing. Given Apple’s large presence in the country due to marketing ties with local e-commerce sites like JD and Pinduoduo offering good prices for iPhones, it will be difficult for local players to match price points without sacrificing their profitability margins too much.
Conclusion
The current state of the smartphone market in China demonstrates the impacts of COVID-19 on the industry. According to Canalys, smartphone shipments in China fell 4% year-on-year in the fourth quarter of 2020, while overall shipments for the year fell 11%. Furthermore, the iPhone’s share of the market jumped from 15% to 18% year-on-year, indicating the resilience of Apple’s products despite the global pandemic.
In this article, we will explore the overall impact of COVID-19 on the Chinese smartphone market and draw various conclusions based on the data.
Summary of key findings
The current state of the smartphone market in China as reported by Canalys reveals an 11% decline in shipments for 2020, compared to 2019. This decline was attributed to the global pandemic and resulting economic downturn. The decline, however, was not uniform across the board as Apple managed to increase its share of the Chinese smartphone market, jumping from 15% in 2019 to 18% in 2020. In the fourth quarter of 2020, totaling 84 million units shipped, year-on-year shipments dropped 4%.
Overall, despite hardships caused by the pandemic, Apple managed to maintain a strong presence in China’s smartphone market. A combination of new releases such as the iPhone 12 Series and increasing consumer preference for iPhones appear to have been driving factors behind Apple’s success within China’s overcrowded market space.
It remains uncertain what effect COVID-19 will have on demand for smartphones within China in 2021 and beyond; however it is almost certain that competition within the industry will remain intense with several Chinese manufacturers attempting to attract customers away from premium priced options like those offered by Apple.
tags = smartphone shipments in China fell 4%, 330M, iPhone, china yoy 84m q4 330m yoyshutechcrunch, Huawei, United States government sanctions, 84M in Q4