China smartphone shipments fell 4 percent in 2017 to 459 million units, and dropped 14 percent in Q4 to 113 million units.
Huawei grew smartphone shipments by 9 percent against the overall market decline, shipping more than 24 million smartphones in Q4 and staying on top. Huawei shipped 90 million units in 2017.
Smartphone shipments of Oppo, the number two brand, fell by 16 percent to 19 million. Vivo’s smartphone shipments dipped 7 percent – retaining its third position in the fourth quarter, with 17 million.
With 13 million, Apple overtook Xiaomi to take fourth place in China. Xiaomi is in the fifth position in China.
“Huawei’s push into tier-three and tier-four cities has yielded positive results,” said Canalys Research Analyst Mo Jia. “Nova and Honor have gained share from smaller vendors, such as Gionee and Meizu.”
Despite the dip in Q4, Oppo and Vivo achieved double-digit annual growth in 2017. Oppo and Vivo have set up flagship stores in tier-one cities to boost their branding and drive value growth. Failure to drive footfall will threaten Oppo and Vivo’s channel transformation and render the exercise futile.
Canalys Research Analyst Hattie He said the Chinese market will have a detrimental impact on those Chinese vendors that have been heavily relying on their home market. It will affect their cashflow and profitability, limiting overseas expansion and bringing into question future survival.
Competition in China will intensify among vendors outside the top five because Lenovo and ZTE are refocusing on the Chinese market in 2018. Canalys said there will be a major market shake-up in China in 2018 as top players will make aggressive plans to maintain or grow their market share.
