Friday, July 22, 2016

2Q 2016: China smartphone market share: Huawei 20.8%, OPPO 12.7%, BBK/vivo 10.6 %, says TrendForce.

Huawei’s production volume has been revised downward; OPPO and Vivo continue with their stellar performances
Huawei’s smartphone production volume in the second quarter increased 7.4% over the previous quarter, arriving at 29 million units. Huawei is secure in its position as the third-largest brand in the global smartphone market, but its domestic rivals are becoming more aggressive. 
The sales of Huawei’s flagship P9, which features a dual camera, may fall short of expectations as other Chinese brands release competitive products. Taking this into consideration, TrendForce has made downward correction to projection of Huawei’s annual smartphone production volume.
OPPO’s and Vivo’s smartphone production volumes were exceptionally high in the first quarter and continued to increase in the second quarter, with growth rates respectively at 15% and 8%. TrendForce expects both brands to maintain strong performances in the third quarter, with quarterly production volume increases exceeding 20%. On the whole, OPPO and Vivo have emerged as clear winners in this year’s smartphone market. 
Wu pointed out several factors for OPPO and Vivo’s success: “Both brands concentrate their operations in China and their main strength lies in their management of their channels, which have spread out into the country’s third- and fourth-tier cities. They are able to maintain their growth momentum via the expansion of their channel networks. 
Furthermore, OPPO designs its products to fit users’ needs and preferences, as in the case of its well-received flagship R9. Vivo on the other hand differentiate itself with special hardware upgrades. Vivo’s Xplay 5, which hit the market in the first half of 2016, was the first smartphone to carry 6GB of memory. In the second half of the year, Vivo will rely on X7 and X7 Plus with their unique camera feature to attract consumers.”
Lenovo’s smartphone production volume in the second quarter benefitted from the returning demand in overseas markets. While the brand is having difficulty increasing sales due to competitors’ aggressive pricing in the low-end and mid-range segments, it has generated interests with innovative products. 
Phab 2 Pro, for instance, is the first consumer smartphone to incorporate Google Tango, an augment reality platform. Moto Z series, which features the modular design, is set for market launch this September. How the market reacts to these innovations remains to be seen. TrendForce projects Lenovo’s smartphone production for this year to be under 60 million units.
Short base period also benefitted Xiaomi in the second quarter. The brand’s quarterly smartphone production volume grew by over 27% to 14 million units. A major sales contributor was Mi Max, a new phablet model that was released this May. Increasing competition and lack of physical retail network will have a negative impact on Xiaomi’s annual production volume, which is projected to be slightly below 60 million units as well.

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