China’s Smartphone Shake-up: Huawei 6th, Xiaomi 5th, Vivo Falls to 2nd

News from January 2024: Canalys, a market research agency, released its latest data showing that the shipment of smartphones in China reached 273 million units in 2023, a 5% year-on-year decrease. However, the overall shipment in the fourth quarter was 73.9 million units, showing a narrowed decline of 1% and indicating an improving trend.

China's smartphone shake-up

The industry landscape underwent significant changes. Huawei, though still categorized under “Others”, saw a 48% year-on-year increase in its annual shipment, reaching a market share of 12%, up by 4 percentage points year-on-year. Benefiting from the strong sales of the Mate 60 series, it shipped 10.4 million units in the fourth quarter, a 47% year-on-year increase, reclaiming its position in the top five in the Chinese market after 10 quarters, ranking fourth.

According to a blogger’s disclosure, since its release at the end of August last year, the Mate 60 series surpassed the sales of all previous Mate series within just four months. However, a source close to Huawei stated that the sales of the Mate 60 series did not actually exceed those of the Mate 40 (with a total sales volume of approximately 32.3 million units), mainly due to the shortage of chips. With the recent increase in production capacity, most models are now available.

Not only the models are making a comeback, but also the Kirin chips. The Mate series introduced the self-developed high-end Kirin 9000S chip, and the nova series adopted the new mid-range chips Kirin 9000SL and Kirin 8000. It is anticipated that Huawei, like a light boat crossing a rough sea, will launch several heavyweight models this year, including the P70 series targeting young users and photography enthusiasts, as well as a new compact foldable screen phone. There are even rumors that Huawei will introduce a new sub-brand “Xingyao” with mid-range phones priced at 2,000-3,000 yuan, focusing on cost-effectiveness to fill the gap left by the previous Honor brand.

China's smartphone shake-up

Xiaomi secured the fifth position, with a 8% year-on-year decrease in shipments to 35.6 million units, maintaining a 13% market share. The official release of the Xiaomi 14 series on October 26 last year, all equipped with the latest Snapdragon 8Gen3 processor and a new generation of Leica Summilux lenses, along with a specifically designed 50MP imaging sensor named “Light Hunter 900”. The Xiaomi 14 features a 6.36-inch OLED flexible straight screen, focusing on small-screen flagship models, while the Xiaomi 14 pro is a large-screen quad-curved flagship model with a 6.73-inch AMOLED flexible screen.

During the “Double 11” shopping festival, the Xiaomi 14 series became the best-selling domestic smartphone in terms of both sales volume and revenue on multiple platforms. Its first sale achieved six times the performance of the previous generation in just 5 minutes. In an interview with CCTV, Lei Jun stated, “I believe that the sales of the 14 will definitely be better than the 13, but I didn’t expect it to be this much better.” However, he also believes that this is the natural result of continuous efforts.

China's smartphone shake-up

Vivo, OPPO (including OnePlus), and Honor secured the second, third, and fourth positions, with annual shipments of 44.5 million units, 43.9 million units, and 43.6 million units respectively, all experiencing a 15%, 13%, and 17% year-on-year decrease. Their market shares dropped by 2 percentage points year-on-year to 16%.

Vivo, the top Chinese smartphone brand, currently focuses on four major series: the high-end X series (including foldable screens), the mid-to-low-end S series, the Y series, and the gaming-focused sub-brand iQOO. In November last year, it released its self-developed large-scale model matrix “Blue Heart Large Model” and the self-developed operating system OriginOS 4.

In the field of technology, OPPO also has significant accumulations. The company has filed patents in over 40 countries and regions, with a global patent application volume exceeding 98,000 by the end of last year and a global authorization quantity exceeding 54,000. Among them, the number of invention patent applications exceeded 89,000, accounting for over 90%.

Honor also made notable advancements, from integrating “Qinghai Lake Battery” and the self-developed RF enhancement chip C1 in its Magic5 series at the beginning of last year to the successful product lines of X50, 90 series, 100 series, Play series, and the foldable screen phones like Magic V2, V Purse, and Magic Vs2. Through in-depth understanding of consumer needs, it continues to make innovative breakthroughs.

China's smartphone shake-up

Apple achieved the highest annual shipments for the first time in the Chinese market, with a 1% increase to 51.8 million units, further increasing its market share to 19%. In the fourth quarter, it shipped 17.5 million units, a 6% year-on-year growth, maintaining its leading position.

However, at the beginning of this year, there have been frequent reports of pessimism from external sources. Renowned analyst Ming-Chi Kuo stated that in the past few weeks, Apple’s weekly shipment volume in China has decreased by 30-40% year-on-year, and this trend is expected to continue. This is mainly attributed to Huawei’s resurgence, including the impact brought by the foldable screen phones.

In recent years, due to the “lack of more attractive features or upgrades,” the iPhone has faced considerable criticism. There are reports that iOS 18 will introduce Generative AI technology, significantly enhancing the capabilities of Siri and Messages applications in terms of question-answering and automatic sentence completion.

It is worth noting that both the vivo X100 series and the Xiaomi 14 series, released last year, already have the ability to efficiently run Generative AI functions on the end. Since the beginning of this year, Samsung has launched the Galaxy S24 series equipped with the Samsung Large Model, and OPPO has introduced the world’s first mobile phone, the Find X7 series, with an end-side application of a 7-billion-parameter large language model. “End-side AI large model smartphones” will become a hot trend in the 2024 smartphone market.

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