Chinese brands make up 42% of smartphones sold globally

Huawei, Oppo, Vivo, Xiaomi and Realme shipped nearly 150 million units in the second quarter of this year, Counterpoint Research report says

Chinese Huawei is aiming to increase its Middle East market share as it expects good sale of Mate 20 X model that supports 5G network. Reuters
Chinese Huawei is aiming to increase its Middle East market share as it expects good sale of Mate 20 X model that supports 5G network. Reuters

Budget-friendly Chinese smartphones with cutting-edge features accounted for more than two-fifths of devices sold worldwide in the second quarter of this year.

“Heavy marketing, faster portfolio refresh, high-spec devices at aggressive prices and multichannel presence are some of the key reasons why Chinese brands fared better than local and global companies,” said Varun Mishra, research analyst at Counterpoint Research in Hong Kong.

Market share of the top five Chinese brands – Huawei, Oppo, Vivo, Xiaomi and Realme – was almost 42 per cent in the three months ended June 30, according to a report by Counterpoint Research. These brands collectively shipped nearly 150 million units in the second quarter, around seven million more devices compared with the same period last year, when global shipments fell 1.2 per cent to 360 million units on 2017, which was the seventh consecutive quarter of decline.

The domestic market in China continues to be challenging as overall consumer spending on smartphones fell, according to researcher International Data Corporation.

A weaker Chinese economy has hit the bottom line of big tech companies such as Apple. Greater China contributed more than 18 per cent to Apple’s overall revenue in its 2018 financial year, but this figure fell more than 4 per cent year-on-year in the second quarter.


To tackle a downturn in the domestic market, Chinese brands are aggressively pursuing expansion overseas.

Industry analysts say low-cost Chinese mobile manufacturers consider the Arabian Gulf states as key to increasing customer base.

“Chinese tech companies are providing economical phones at as low as $88 [Dh320] … [they] may have a comparative advantage in the Gulf where a large swathe of workers are in blue-collar jobs,” Sam Blatteis, chief executive of The Mena Catalysts, which advises tech companies on regional policies, told The National.

Moreover, strengthening of Gulf-Chinese trade ties is dissolving barriers for smartphone manufacturers from the Asian state to enter the region, said Mr Blatteis.“This is a significant opportunity, and it is leading Chinese firms to think at-scale about the region now.”

In its second-quarter earnings, South Korea's Samsung – world's biggest smartphone manufacturer – said its mobile business remained weak. Weighed down by slower sales of flagship models and increased marketing expenses, profit for its mobile business slipped 42 per cent from a year ago.

Although Samsung is still the global leader in terms of market share, its popular Note 9 phone has failed to take off while its mid-tier and low-end devices face strong competition from Chinese brands.

“When you look at the top of the market – Samsung, Huawei and Apple – each vendor lost a bit of share from the last quarter, and when you look down the list the next three – Xiaomi, Oppo and Vivo – all gained,” said Ryan Reith, programme vice president with IDC.

Market experts say the growing share of Chinese brands is expected to continue in the coming months and part of this is attributed to the strategic timing of their product launches.

Strategies and product portfolios of Chinese manufacturers are more aligned to the local needs and preferences, said Mr Mishra. “This is one of their key strengths, leading to a good gain in market share.”

Updated: August 4, 2019 05:35 PM


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