Growth Outside of China Pushes Use of Chinese Smartphones Up 47% YoY
According to Newzoo’s Global Smartphone and Tablet Tracker, the number of active smartphones globally reached 3.0 billion in October 2017, growing +10% from a year before. Major Chinese brands Huawei, Lenovo, Oppo, Vivo, and Xiaomi together saw an impressive growth of +47% in the same period. Expressed in absolute numbers, this growth seems even more impressive; in the period of a year, an additional 288 million Chinese smartphones of these five Chinese brands were activated, now totaling 905 million worldwide or 30% of all smartphones in use. Importantly, more than half, or 59% to be exact, of this increase comes from markets outside of China, with notable growth in world’s second-largest smartphone market: India.
THE WORLD WILL USE 1 BILLION CHINESE SMARTPHONES IN 2018
At the current pace of growth, the five main Chinese brands alone will have more than a billion smartphones in use this year, with an increasing share used outside of China. In October 2016, 26% of Chinese smartphones were used outside of China: 161 million devices. This doubled to 332 million in October 2017, representing 37% of all Chinese smartphones. Growth has come predominantly from growth regions rather than developed Western markets. In India, the number of Chinese smartphones almost quadrupled to 121 million in October 2017 from 37 million 12 months before. The image below shows how the share of Chinese smartphones has increased at cost of other main brands on a global scale.
CHINESE CHALLENGER BRANDS VIVO AND OPPO LEAD THE CHARGE
In October 2016, Huawei and Xiaomi were the clear leading Chinese smartphone brands, ranked third and fourth, respectively, behind Samsung and Apple in terms of users worldwide. A year later, Oppo has taken the fourth position from Xiaomi and is only a few million units behind Huawei. Following a year in which it increased its user base from 74 million to 173 million, Vivo has become the #6 phone brand in the world, now also challenging Xiaomi. The success of Chinese brands has resulted in a lower market share for most non-Chinese brands, particularly Samsung, LG, and Sony. The image below compares the different smartphone brands in terms of year-on-year relative growth.
BATTLE FOR MARKET SHARE IN THE #2 SMARTPHONE MARKET: INDIA
More than one-third of the 320 million smartphones in use in India are now Chinese: 37% in October 2017 when looking at the five biggest Chinese brands. This market share was at only 15% a year before. In India, local power brand Micromax has lost a large part of its market share to Chinese competitors. Looking at other countries, it is obvious that Chinese manufacturers are focusing less on the mature Western markets and more on growth markets such as Indonesia and Russia, where the number of Chinese smartphones used jumped 90% and 78% year on year, respectively. Growth in the U.S. was high (50%) but absolute numbers are very low. Only 1.5 million smartphones used in the U.S. were from a Chinese manufacturer in October 2017.
The best performing Chinese brands in India in order of market share are Xiaomi (13.8%), Vivo (8.6%), Oppo (8.3%), and Lenovo (7.4%). With a 0.9% market share, Huawei, with its range of high-end phones, is clearly not focusing much on India. In fact, smaller Chinese brands such as Gionee and OnePlus perform better in India than Huawei.
Of course, there is a big difference in the type of smartphones used within individual countries. Newzoo’s Global Smartphone and Tablet Tracker tracks brand performance as well as individual models and technical specs using data from one in three smartphones used in the world. High-end smartphones, defined by a minimum of 2GB RAM, 2 CPUs, fingerprint sensor, NFC, 4G, and released in 2014 or later, represent a global market share of 30%. For the U.S., China, and India, this share was 51%, 19%, and 7%, respectively, in October 2017.
