Apple Dropped To Fifth Position in China’s Smartphone Market in 2016 As Chinese OEMs Made Significant Progress

Apple might have sold a record-breaking 78.3 million iPhone units in the last quarter of 2016 and overall had a great 2016. However, despite making heavy investments in China and rapid expansion, the company lost market share in China to other local Chinese OEMs.

As per a report from Canalys, Apple dropped to the fifth position in China in 2016 behind Xiaomi, Vivo, Oppo, and Huawei. Apple’s iPhone shipments in China declined by 18.2 percent to 43.8 million units, its lowest since 2013. Like with consumers in international markets, Chinese consumers are also eagerly awaiting the launch of iPhone 8 that is expected to come with a new design, OLED screen, and wireless charging.

Huawei was the market leader in China in 2016 and sold a record 76.2 million smartphones. This was followed by BKK-owned Oppo and Vivo taking the second and third spot respectively, with the companies selling 73.2 million and 63.2 million units, respectively.

While Apple, Samsung and Xiaomi are all in the process of adjusting their strategies in China, Huawei took the opportunity to consolidate its position in the tier-one and tier-two cities. Ding noted that, meanwhile, “Huawei also began attacking Oppo and Vivo’s backyard in the tier-three and tier-four cities, through its “thousands of towns”, targeting open channels.”  Conversely, Oppo and Vivo started to move upscale to target consumers in the tier-one and tier-two cities through heavy investments in branding.

Despite struggling, Xiaomi was the fourth largest smartphone maker in China in 2016 and shipped 51.4 million smartphones, its lowest since 2013. This represents a decline of 21 percent on a year-on-year basis. The company has realised its online-only strategy is not doing it any good and plans on expanding its retail presence in China in 2017.

A lot depends on the iPhone 8 for Apple in China where the company lost the most market share in 2016. This is despite Apple’s continued investment and expansion in China, though it has suffered many setbacks due to the Chinese government favouring local companies.

Interestingly, Huawei, Oppo, Vivo, and Xiaomi were all known for launching iPhone lookalikes at one point of time. Now, these companies have managed to surpass the iPhone in sales even though it is only in their home market.

[Via Canalys]