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China second-tier handset brands to face more upheavals in 2019
Source: DIGITIMES   Editor: AVA   Update Time :2019/1/7 16:52:18

China's second-tier handset brands are bracing for more upheaval in 2019 as their first-tier competitors are expected to continue to consolidate their market share, while handset demand is retreating, according to industry sources.

First-tier vendors, including Huawei, Xiaomi, Oppo and Vivo together with Apple currently account for a majority share of the smartphone market in China, said the sources.

Optimizing their shipment volumes, China's first-tier vendors have sharpened their competitiveness, in respect to domestic or foreign brands, through enhanced ties with supply chain makers, stated the sources.

Additionally, China's telecom operators are reducing their subsidies for the purchases of 4G-enabled smartphones as the users of 4G services in China have reached over 1.1 billion, according to Digitimes Research.

Affected by reduced subsidies and deferred replacement demand, smartphone shipments in China edged up by a low single digit on quarter but down 6.9% on year in the third quarter of 2018, with overall shipments to continue to fall year-on-year in the fourth quarter, Digitimes Research added.

Even first-tier vendors have felt the pinch with the declining momentum. Huawei was the only vendor that saw its shipments grow over 20% sequentially in the third quarter of 2018, as Xiaomi and Oppo posted single-digit growth for the quarter. And Vivo actually suffered a sequential decline in the period.

With a low prospect for a strong rebound in demand, China's first-tier brands are expected to gear up efforts, including aggressive marketing strategy and a further enrichment of their product pipelines, to solidify their market share, making the market more volatile for second-tier vendors and forcing them to exit the market, commented the sources.

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