China Smartphone Shipments Thrive as Apple Stumbles

By Douglas A. McIntyre Updated Jan 13, 1:48AM EST · Published Oct 28, 8:35AM EDT

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China Smartphone Shipments Thrive as Apple Stumbles — © Thinkstock

Apple Inc.’s (NASDAQ: AAPL) earnings showed how badly its sales have eroded in China. Further proof is data from Strategic Analytics, which shows smartphone shipments in China soared in the third quarter, while Apple’s cratered.

Linda Sui, director at Strategy Analytics, said:

China smartphone shipments grew a healthy 15 percent annually from 105.0 million units in Q3 2015 to 120.9 million in Q3 2016. This was the fastest growth rate for a year. China remains by far the world’s largest smartphone market, accounting for nearly 1 in 3 of all 375.4 million smartphones shipped globally this quarter. China’s smartphone market is returning to faster growth in the second half of this year, due to a more stable economic climate, multiple flagship 4G model launches, and solid direct or indirect subsidies from Chinese operators.

With one exception, local smartphone companies were the winners. Neil Mawston, executive director at Strategy Analytics, said:

Huawei shipped 18.0 million smartphones for 15 percent China marketshare in Q3 2016, dipping slightly from 16 percent a year ago. Huawei remains the number one smartphone vendor in China, but it is steadily losing ground to ambitious rivals OPPO and Vivo. OPPO soared 136 percent annually to ship a record 17.0 million smartphones and capture 14 percent marketshare in Q3 2016. OPPO is closing in on Huawei and is poised to overtake in the next quarter or two. OPPO’s R and A series models have been well received in second-tier cities and rural areas of China. Vivo maintained third position with a record 14 percent smartphone marketshare in China during Q3 2016. Vivo’s success lies in good hardware designs, robust product quality, strong retailer penetration, and rising brand awareness among mass-market consumers.

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And the local loser:

Xiaomi delivered yet another weak quarter, falling 31 percent annually and shipping 11.4 million smartphones in China in Q3 2016. Xiaomi clung on to fourth position with 9 percent marketshare, almost halving from 16 percent one year ago. Xiaomi is facing tough competition in mid-tier segments from Huawei, Gionee, LeEco and others.

As for Apple:

Apple iPhone captured 6 percent smartphone marketshare in China in Q3 2016, sliding from 10 percent in Q3 2015. China is Apple’s biggest challenge right now, where it is battling intense competition from Huawei, OPPO and others with their improved high-end smartphone designs and expanded distribution networks. The new iPhone 7 range will help Apple to fight back in the next quarter or two, but this may bring only temporary relief as local Chinese players continue to ramp up their efforts to conquer the China market.

China Smartphone Vendor Shipments and Marketshare in Q3 2016 [1]

China Smartphone Vendor Shipments (Millions of Units)	Q3 ’15	Q3 ’16	Growth YoY %
Huawei	16.5	18.0	9%
OPPO	7.2	17.0	136%
Vivo	9.1	16.5	81%
Xiaomi	16.5	11.4	-31%
Apple	10.8	7.5	-31%
Others	44.9	50.5	12%
Total	105.0	120.9	15%

China Smartphone Vendor Marketshare (%)	Q3 ’15	Q3 ’16
Huawei	15.7%	14.9%
OPPO	6.9%	14.1%
Vivo	8.7%	13.6%
Xiaomi	15.7%	9.4%
Apple	10.3%	6.2%
Others	42.8%	41.8%
Total	100.0%	100.0%

Total Growth: Year-over-Year (%)	0.0%	15.1%

Source: Strategy Analytics

1. Numbers are rounded.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.