Chinese smartphone manufacturers such as Huawei, Oppo, and BK Communication Equipment showed immense sales growth in the smartphone arena in 2016.
The verdict is out; Gartner’s smartphone sales figures for 2016 reveal that while Samsung and Apple still top the charts, Chinese manufacturers such as Huawei, Oppo, and BK Communication Equipment showed stellar growth throughout 2016.
While Samsung and Apple retain a large share of the market – at 19.2% (down from 23.6%) and 11.5% (13%) respectively, both Huawei, Oppo, and BBK Communication Equipment grew their total market share.
While Huawei improved from a 7.7% share in 2015 to 8.7% in 2016, Oppo managed to nearly double its market share from 3.4% in 2015 to 6.7% in 2016. Similarly, BBK Communication Equipment grew from 2.9% in 2015 to 5.3% in 2016.
“œThree Chinese vendors ““ Huawei, Oppo, and BBK Communication Equipment ““ together accounted for 21% of the smartphones sold to end users worldwide in the third quarter of 2016… They were the only smartphone vendors in the global top five to increase their sales and market share during the quarter” Gartner said in a statement.
Unpacking the change
Overall, Chinese manufacturer’s growth was heralded by a number of factors in 2016. While Samsung began the year with a solid start thanks to the critically claimed Galaxy S7 and S7 Edge, the firm fell short when it was forced to recall and later utterly cease production of its Note 7 handset.
Apple has conversely seen declining iPhone sales over the past year, with the company hedging its hopes on the iPhone 7 and 7 Plus – with mixed consumer and critical reaction over the firm’s controversial design decision in dropping the 3.5mm headphone jack beginning a turbulent sales period.
Chinese manufacturers have made strong forays into the global market with Android-based offerings; the Google mobile operating system has captured an enormous 84.7% of the global market, enabling Chinese manufacturers to not only piggyback on the strength of Google’s services, but further introduce bespoke software features in the form of Android skins.
Whereas Chinese smartphone manufacturers were once notorious for the ‘rip-off’ design language employed to impeach the success of Apple’s iPhone or Samsung’s Galaxy line, many Chinese manufacturers have instead opted to drive hardware innovation themselves.
Two prominent examples of this were seen this year when Huawei introduced its dual-lens P9 smartphone earlier in the year which accommodated a Leica-made camera setup, while Xiaomi toted the near bezel-less Mi Mix to consumer acclaim in November.
The cost effective nature of many Chinese handsets has driven consumer uptake; targeting rich mobile economies such as India, Indonesia, Russia and South Africa, handsets produced by the likes of Huawei and Xiaomi targeted the critical mass of consumers which are the ‘next billion’ to access the internet as the prevalence of feature phones begins to fade.
A fight in close quarters
The strategies adopted by many prominent Chinese manufacturers have left Apple and Samsung to contest in increasingly tight quarters.
While Samsung has historically executed a strong lineup in the budget market, its budget smartphones have been often undercut by Chinese models which sport both a higher slate of specifications and a lower price tag.
To that end, the firm has championed Tizen – its own operating system – as the platform of choice for the budget end, but has been unable to draw the critical mass of developers which proliferates the Android ecosystem.
Apple has never truly competed in the budget range, with its one attempt to do so – the budget iPhone 5c – declared a flop. The firm reiterated its intentions with the iPhone SE this year – a device designed to the physical standard of the iPhone 5 with many components found in the iPhone 6s – but elected to target the mid-to-upper range of the market instead.
Overall, it is likely that the expansion of Chinese manufacturers into the global market space will continue at a faster rate than before. Given the success of manufacturers such as Huawei, Oppo, and Xiaomi to target developing nations and indeed the wider international stage with low-budget offerings, the market share of Chinese handsets running on the Android platform will likely only increase.
Given the declining realm once occupied by Windows Phone, BlackBerry 10, and Symbian, Huawei, Oppo, and BBK Communications can likely look forward to a positive 2017.
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