Canalys report on the state of the Chinese market in the last quarter and the whole year of 2019

Canalys report on the state of the Chinese market in the last quarter and the whole year of 2019

Canalys report on the state of the Chinese market in the last quarter and the whole year of 2019

News unit Canalys Research Institute on Tuesday, January 28, 2020 (8 February 2018), while presenting a report on the Chinese smartphone market in the last quarter of 2019, a comprehensive report on the state of this market in the whole of 2019 published. According to this report, the supply of smartphones in the Chinese market has reached 85.3 million units, with a 15% annual decline. This is the 11th consecutive season that the supply of smartphones in the Chinese market faces a decline. In 2019, a total of 368.6 million smartphones entered the Chinese market, which is a 7% decrease compared to the same period last year (395.5 million units).

Canalys experts believe that the Chinese market in the last quarter of 2019 (a season in which we have always seen sales growth in previous years), left behind an extremely weak performance. This phenomenon is mainly attributed to two factors: an apparent slowdown in 4G smartphone purchases and weaker-than-expected demand for 5G smartphones by major vendors. In the meantime, the distribution channels started emptying the inventory of 4G smartphones in the hope of attracting 5G phones in the new year.

The supply status of 5G phones in China by brand in 2019

Huawei released 33.3 million smartphones to the Chinese market in the fourth quarter of 2019. This amount, despite a significant drop of 20% compared to the third quarter, has increased up to 11% compared to the same period last year, and in this way, Huawei has maintained the first rank with a 39% share of the Chinese market. It is interesting to know that, except for Huawei, the performance of other companies in the fourth quarter faced negative growth.

During the recent season, Oppo and Vivo respectively 14 and 13.1 million smartphones entered the market and took 16.4 and 15.4 percent of the Chinese market share. Compared to the fourth quarter of 2018, the supply of smartphones of these two brands dropped by 25% and 29%, respectively, which is worse than the average decline in the Chinese market, but despite all these, these two companies were able to maintain their second and third positions in this market. do

The state of smartphone supply in China from the first quarter of 2013 to the fourth quarter of 2019

In the past quarter, 10.1 million iPhones were introduced to the Chinese market, which of course The figure is 12% less than the number of iPhones released in the last quarter of 2018, but despite this, Apple managed to reach the fourth place in the Chinese market by upgrading one step. The supply of Xiaomi smartphones also decreased by 14% annually to 8.1 million devices decreased and this company finally settled for the fifth place in the Chinese market.

As mentioned, Huawei In the fourth quarter, it released more than 33 million smartphones to the Chinese market. But Huawei’s continuous growth in the last 12 months should be viewed with more caution. According to Nicole Peng, vice president of mobile at Canalys, the temporary increase in clearance inventory in the second and third quarters adversely affected Huawei’s performance in the fourth quarter. With 4G smartphones becoming increasingly difficult to sell (especially in the mid-to-high end range), it will be challenging for the company to convince smartphone distribution partners to increase their share of purchases from Huawei devices in 2020. It is true that 78% of 5G smartphones in China currently belong to Huawei, but the company needs to reduce the pressure of 4G device inventory on these channels by helping distribution channels before saturating the market with 5G devices. .

The state of smartphone supply in China in the fourth quarter of 2019

Apple managed to make up for the decline by gaining 11.8% of the Chinese market in the fourth quarter. During the last 8 seasons, this is Apple’s highest share of the Chinese market. This American company was able to reduce its decline to 12% by supplying 10.1 million iPhones to the Chinese market. According to Peng, the competitive price of the iPhone 11 , has played an important role in Apple’s positive results in the recent quarter. Considering the industry’s rapid acceleration towards replacing 4G phones with 5G smartphones, it is likely that consumers will delay buying a 5G phone until devices enter the market that will not lose their functionality so soon.

But the iPhone 11 series – contrary to this trend – was able to win the title of the best-selling 4G phone in China. The iPhone 11 showed that there is still an attractive factor for Apple products thanks to the reasonable price and the strength of the service ecosystem and hardware. This means that when Apple’s 5G iPhones hit the market, consumers will be more receptive to upgrading their phones than previously anticipated.

Oppo and Vivo suffered more than others from the drop in the Chinese market. According to Louis Liu, Canalys research analyst, the main cause of this phenomenon should be found in the reluctance of distribution channels in the last quarter. Of course, positive things can be seen in the recent quarterly records of these two companies. With the release of 1.2 million units of 5G smartphones in China, Vivo became the second fifth-generation phone supplier in the country after Huawei. Also, considering the release of more than 400,000 units of the Reno 3 series within a week, Reno – Oppo’s new brand – showed that it has a bright future ahead of it. Each vendor is determined not to cede market share to Huawei. Also, these brands are poised to continue their fight with the release of more powerful 5G smartphones in 2020.

The State of China’s Smartphone Launch in 2019

According to Nicole Peng’s forecast, this year is expected thanks to the widespread rollout of 5G and more incentives from operators 5G smartphones shipped to China in 2020 will exceed 150 million units. Smaller brands hope to break the dominance of big name brands on the market. Meanwhile, the competition between the top 5 brands will be very close and brutal. Due to the unexpected outbreak of the corona virus, the Chinese market has faced a lot of pressure to downsize. This will have an adverse long-term impact on China’s manufacturing industry, the country’s retail sector, and consumption by Chinese consumers. Therefore, following the spread of this disease, sellers should prepare themselves for business risks and further disruptions in the future.

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