Huawei, Apple, Honor, OV & Xiaomi Clash in 2024


Image Source: Canva

Throughout 2023, many industries gradually began to recover, yet the mobile phone industry seemed to barely feel the breeze of this “spring.” Despite manufacturers’ best efforts, the general slump and shrinking market size persisted without significant improvement.

Yet as competition within the industry intensified, the landscape of the mobile phone sector underwent significant changes. Huawei, once heavily sanctioned, made a dramatic comeback in the smartphone market, significantly impacting the established hierarchy, especially in the high-end segment.

Shifting Sands in the High-End Market

Amidst the market turmoil, manufacturers turned their gaze toward the lucrative high-end space, hoping to claim their share. But slogans were never enough to conquer this arena—real strength was a necessity. During the past three years, as Huawei faced restrictions, brands like Xiaomi and OV (Oppo and Vivo) attempted to challenge the high-end status quo. Apple, however, solidified its dominance and claimed a large portion of the market left by Huawei. But with Huawei’s re-entry, this market dynamic is gradually changing.

Firstly, Apple’s “solo run” at the top is becoming a thing of the past as a more competitive landscape with multiple strong players like Huawei and Apple emerges. Public data reveals that from 2021 to 2023, Apple experienced its golden era in the Chinese market. With Huawei’s sales in sharp decline, Apple steadily regained lost ground, at one point holding over 80% of the high-end market share, with revenue showing yearly growth.

During this time, other manufacturers like Xiaomi, OPPO, and Vivo also vied for high-end market share but could only capture a small slice. According to Canalys’ 2022 global smartphone market share report, the top five global smartphone manufacturers included Samsung (22%), Apple (19%), Xiaomi (13%), with OPPO/Vivo holding 9% each, and others categorized separately. Notably, both Samsung and Apple increased their overall market shares by 2%, while Xiaomi, OPPO, and Vivo each saw a 1-2% decline, indicating that Samsung and Apple were encroaching on the shares of their Chinese competitors.

As per the latest data from 2023, this trend has continued. Canalys states that with the launch of the new iPhone, Apple claimed the number one spot with a 24% market share, followed by Samsung with 17%; Xiaomi’s growth exceeded 20% in the fourth quarter, securing the third position; thanks to a resurgence in emerging markets, Transsion climbed to fourth, and Vivo entered the top five with a 7% share.

Apple and Samsung maintain their lead globally, yet the Chinese market is witnessing a change. Whether it’s the success of the Huawei Mate 60 series or the popularity of the pricier Huawei RS models, these developments externalize Huawei’s strong return. With Huawei’s resurgence and the hot sales of the Xiaomi 14, the domestic high-end market is witnessing a competitive battlefront led by Apple and Huawei, with Honor, Xiaomi, OPPO, and Vivo closely contesting.

Secondly, the high-end and even ultra-high-end markets are revealing new possibilities. Statistics for Q4 of 2023 show that in China’s high-end market beyond 10,000 yuan, the Huawei Mate X5 alone boasts an impressive 30% market share. Huawei’s dominance in the ultra-high-end market, particularly in foldable screens, is undeniable, and the success of the Mate X5 stands as a benchmark for industry exploration in the ultra-high-end space, offering valuable lessons for other manufacturers. The introduction of high-performance chips and the implementation of large-scale AI models are opening up new frontiers for the high-end smartphone market.

Foldable Screens: The New Battleground

In the bigger picture, smartphones are now innovating across all niches in response to extreme supply and demand conditions, with the burgeoning foldable screen segment being a prime example.

Firstly, Chinese smartphone manufacturers are paving their unique paths in the foldable screen market, focusing on their strengths and avoiding weaknesses. Honor, for example, has addressed the “bulkiness” issue of foldable screens, pushing forward with a thinner and lighter design. The Honor Magic V2 achieved a 9.9mm thickness and a weight of 231g, ushering in the era of millimeter-scale foldable phones. The Magic Series saw a 107.2% year-over-year growth, driven by the Magic V2, with a 20% sequential increase.

In contrast, Huawei, OPPO, and Vivo have concentrated more on improving their imaging technology. For instance, OPPO’s Find N2 Flip, released in 2023, features a larger outer display and enhanced user interaction and image capabilities. Xiaomi’s MIX Fold 3 also includes high-spec image features, and Huawei’s latest foldable Mate X5 is equipped with a periscope-style telephoto lens—a rarity in slim foldable phones—featuring a 50-megapixel RYYB sensor, a 13-megapixel ultra-wide-angle camera, and a 5x periscope telephoto lens.

Secondly, Apple’s potential entry into the foldable screen market could significantly shake things up. Across the global smartphone industry, foldable screens are becoming a pivotal trend. Manufacturers like Samsung, Huawei, Xiaomi, Honor, OPPO, and Vivo have all released their foldable models, while Apple has yet to make a move. Industry speculation suggests Apple prefers to enter mature markets with clear demand trajectories, where they can leverage their brand and technological strengths to stir up the industry.

As foldable screen phone production ramps up, rumors of Apple joining the fray are mounting. Insiders close to Apple suggest that a foldable iPhone could debut in 2024, with mass shipments expected in 2025. If true, this would significantly impact all foldable phone manufacturers. Huawei’s dominance in China’s foldable screen market and Samsung’s global leadership could face challenges from Apple’s entry.

Moreover, Apple’s presence would further intensify competition in the mid-range foldable screen market. An influx from Apple would heat up the high-end market competition; meanwhile, Samsung and Huawei would likely increase their focus on the mid-range segment, putting pressure on Xiaomi, OPPO, and Vivo and heightening the competitive atmosphere.

The Accelerating Trend Towards Larger Storage

Beyond foldable screens, another dramatic change in smartphones stems from supply-side fluctuations: the trend toward more substantial internal storage is picking up pace.

Compared to a few years ago, when 128GB was the baseline, most smartphones in 2023 have upgraded to starting with 256GB. Manufacturers, sensing new consumer demand, are doubling down on this trend. Redmi’s Lu Weibing expressed on social media, “The popularity of large memory models confirms Redmi’s path to popularizing large memory smartphones.” This trend is not just a display of goodwill by manufacturers but rather a consequence of industrial trends.

On one hand, after entering a downward cycle, an oversupply of storage components led to plummeting prices, making widespread larger storage capacity economically feasible. According to data from the CFM flash memory market, the price of 1Tb TLC fell from about $6 in August 2022 to approximately $3.66 in February 2023; the price of LPDR4X 48Gb dropped from around $18.5 in August 2022 to about $16.5 in February 2023.

Industry experts indicate that a supply-dominant market dynamics have led to a downward cycle, primarily driving down DRAM and NAND prices. This oversupply scenario, indeed, led to a reduction in flash memory costs, subsequently facilitating the widespread adoption of smartphones with larger storage capacities.

On the other hand, in a smartphone innovation landscape that’s seen as underwhelming, consumers are placing more value on tangible functionalities and benefits. Having more memory without additional cost naturally resonates with users. In recent years, despite various improvements from battery life to screen technology, smartphone brands inevitably found themselves in a cycle of homogenization due to several factors. Consequently, consumer desire to upgrade is waning, and upgrade cycles are elongating.

From the user’s perspective, significant pain points remain, one of which is inadequate memory. Addressing this, manufacturers are significantly increasing memory capacities without raising prices, quickly capturing a fan base, improving user experience, boosting sales, and expediting inventory offloading. These factors significantly promote the normalization of large storage capacities in smartphones.

The Smartphone Battle Continues into 2024

After a brutal three-year downturn, there seems to be no clear recovery in sight for the smartphone industry as we enter 2024, suggesting that a fiercely contested scenario will continue.

Firstly, the smartphone market hasn’t completely stabilized, implying limited growth opportunities for manufacturers. According to data from TechInsights’ Wireless Smartphone Strategies (WSS) service, the global smartphone market is expected to see low single-digit growth in 2024. A somewhat relaxed global macroeconomic climate may contribute to the rise of the smartphone sector, but with many players in the supply chain and large smartphone manufacturers, this marginal growth offers limited traction, and competition in niche markets is bound to intensify.

Second, Huawei’s powerful re-emergence also amplifies the competitive intensity within the industry. The Mate 60 series has been a market hit since its launch, with its Pro and extraordinary master series models being particularly difficult to obtain. Due to strong demand for these new models, Huawei boosted its original shipment forecast from 70 million units predicted internally to 100 million units, 30% above expectations and far exceeding external forecasts. Beyond this ambitious plan, Huawei’s targets may not just be reclaiming territory in the high-end market but also retrieving its middle and low-end market shares lost after the sale of Honor.

Insiders have revealed that Huawei is launching a new smartphone sub-brand called “Xingyao” aimed at the mid-low end market. If true, this move could unsettle competitors given Huawei’s multitude of innovations. Huawei’s comeback not only revitalizes a somewhat homogenized market but also signifies more intense competition, especially in the 2,000 to 5,000 yuan price range, where there are still opportunities for growth.

Lastly, the development of AI models continues to intensify alongside the supply chain. We can observe that following the sweeping influence of large-scale AI models across industries, the race for edge AI models in smartphones is heating up. Huawei has unveiled the upgraded HarmonyOS 4.0 with its Xiaoyi Assistant, capable of multiple functions including tool usage, memory extension, task scheduling, logic reasoning, and knowledge acquisition. Xiaomi has fully integrated AI model capabilities into its Surge OS, and OPPO, in collaboration with MediaTek, is pushing forward the Andes large model to enhance performance and drive personalization in smartphones.

Looking ahead to 2024, the smartphone industry is bracing for an escalation of the battle, with manufacturers setting sail into this new storm, determined to make their mark.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.