The Chinese smartphone market has experienced tough competition in the last few years. Currently, Huawei is the top smartphone manufacturer in China, with Oppo and Vivo rounding out the top three. Xiaomi and Apple hold the fourth and fifth position respectively, while Samsung has struggled to gain a foothold in recent times. In stark contrast to OEMs such as LG, HTC, and Sony, Chinese OEMs have been experiencing success in both in their home market as well as in international markets.
For example, Huawei is Samsung's biggest competitor in Europe, and is the third largest smartphone manufacturer worldwide. Oppo and Vivo are India's third and fourth largest smartphone manufacturers respectively. Xiaomi, on the other hand, is either the first or second largest OEM in India, depending on who you ask. The combined strength of the Chinese OEMs is such that Samsung is expected to lose market share globally in 2018 because of increased competition. Huawei and Xiaomi are also rumored to enter the US smartphone market next year via carrier partnerships.
However, smartphone demand can go up and down, and the effects are being felt on even top players such as Huawei, Oppo, and Vivo. A report by Digitimes states that Chinese OEMs including Huawei, Oppo, and Vivo (BBK) cut smartphones orders by 10% from the supply chain makers for Q4 2017.
The report went on to state that the reduction in orders happened because worldwide smartphone demand has been weaker than expected recently. This is also said to have resulted in rising inventories at channels (because of the imbalance in supply and demand). It added that OEMs' orders to the supply chain makers for Q1 2018 are also likely to be lower than expected, which will affect the performance of most upstream supply chain players during the stated period.
Digitimes noted that Xiaomi seems to be the exception when it comes to cutting smartphone shipments. Xiaomi has continued to experience stable sales for its smartphones, and according to the report, it is "one of a few smartphone vendors that are able to stay out of the influence of the unfavorable market trends thanks to its strong operations in both offline and online operations."
In particular, the firm has experienced incredible success in India, as its budget phones have gone on to become bestsellers in the country. Thanks to online sales, Xiaomi managed to sell 10 million smartphones in a single month in all the territories it does business in, and is on track to beat the 70 million smartphone shipments record which was set in 2015. The firm's momentum clearly isn't slowing down as well—it recently launched budget smartphones with 18:9 displays in the form of the Redmi 5 and the Redmi 5 Plus in China.
The Digitimes report added that Huawei is currently facing tough competition from the likes of Xiaomi, Oppo, and Vivo in India. To overcome the situation, the company's subsidiary Honor has recently launched the affordable Honor 7X starting for Rs. 12,999 (~$203) in the country. The report also noted that Huawei is expected to increase its efforts and campaigns to expand its presence in the Indian market next year.
Finally, Digitimes noted that Oppo's smartphone sales in retail channels and brick-and-mortar stores in China have weakened recently. This is why the Chinese OEM has shifted its focus to online sales at a time when Xiaomi is moving in the opposite direction. In India, Oppo has partnered with e-commerce platforms such as Amazon and Flipkart to increase its sales, and remains one of the top two Chinese brands in offline retail along with Vivo.
The struggle between the Chinese OEMs clearly isn't going to end anytime soon. With many smartphone launches on the horizon including the Honor View 10, the international launch of the Redmi 5 and the Redmi 5 Plus, and more, it seems likely that the reduction in smartphone shipments for Q4 2017 will only be a temporary measure as the OEMs gear up to continue their international expansion.
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