Smartphones continue their steady growth across the world. According to Counterpoint Research, the total smartphone shipments in Q2 2017 peaked 365 million units, a new record for any second quarter ever. Given that many major flagships are yet to be released in the second half of the year, we can expect a considerable surge in the upcoming months.
However, one of the most striking patterns that has emerged is the sheer dominance of Chinese smartphone makers in the global market. The most surprising element in this inference is that majority of the growth by Chinese brands has occurred outside China.
In fact, Chinese brands now own 48% of the global smartphone market share. This figure has now surpassed the total market share owned by other non-Chinese global brands.
Take a look at this explosive growth by Xiaomi, Vivo, Oppo and Huawei. The above graph depicts Year On Year shipment growth of major brands in China vs Global markets in Q2 2017.
Most of this growth can be attributed to the increasing smartphone penetration in emerging markets like India and a few countries in South-East Asia. At least one Chinese brand is among the top 3 spots in each of these countries. All of these brands are aiming to strike a generous balance between offline and online channels to reach more consumers. Their expansion efforts are further fueled by aggressive marketing campaigns in countries with massive opportunities like India.
The next time you wait in a flash sale to get a Xiaomi phone, know that it is the fastest growing brand in the world (60% YoY growth). The next time you are stunned by a Huawei phone’s superb specifications, know that it’s the 3rd most selling brand in the world (after Samsung and Apple). The next time you see hoardings of Oppo and Vivo all around, know that this heavy influx of advertising spend is to constantly be in front of your eyes while they continue their growth.
According to the same research, 80% of all the phones shipped globally are now smartphones. However, this trend seems to have a contradictory effect in India, as many brands have launched feature phones in quick succession over the past few months. But even these feature phones come with 4G VoLTE and have some additional advantage over the basic lot. This seems like a strategy to capitalize upon the long tail of consumers and enable them to start using phones. However, Chinese makers seem unbothered about this opportunity as Indian brands cater to it.
It is undeniable that Chinese smartphone makers have been innovative in their approach of ideating, manufacturing, marketing and selling smartphones across the world. They can also be credited for bringing top-end features to mid-ranged smartphones. Thus, their global dominance is a culmination of all these factors and OS standardisation provided by Android. If these manufacturers were to make their own OS & App Store, they wouldn’t have succeeded. Given that software challenge of building an OS and attracting developers is out of picture, Chinese companies have dominated the hardware game which isn’t as much of a surprise to many.
As we move forward towards the second half of the year, a new iPhone, the Galaxy Note 8, Pixel 2 and a bunch of other launches await us. This may help other global brands inch closer to the Chinese dominance. But the upcoming years will be an exciting phase for the global market as new technologies start showing up in smartphones. As companies like Apple and Samsung use their massive resources to develop cutting edge technologies, Chinese brands will try to bring those features into lower priced phones, possibly continuing their dominance in the process.
Do you own a smartphone made by a Chinese brand? What do you like the most about your phone? Let us know in the comments section below.