China’s smartphone market, though presently facing a downturn, is poised for a comeback, largely driven by electronics powerhouse Huawei. The latest findings from Canalys reveal that Huawei has increased its domestic smartphone market share in Q3 this year, with an upward trajectory that brings it closer to the top five players in the market. This upward swing is attributed partly to the launch of the Mate series devices.

Furthermore, Canalys anticipates that Huawei will not only maintain this upward trend but also invigorate the overall market. The company’s data reveals that the Chinese smartphone market, though experiencing year-on-year declines in shipments since the end of 2021, has shown signs of improvement over the last two quarters. Despite this, Q3 still saw a 5% decline, settling at 66.7 million units.

“The market hit a low point in 2023, but vendors have held steady, refining channel incentive policies, and we expect a gradual recovery” said Canalys Senior Analyst Toby Zhu. He also expressed optimism about consumer trends, highlighting that consumers are still willing to pay for products within their budget offering attractive propositions.

Despite a decrease in replacement cycles, Zhu predicted that Huawei will generate a ‘Catfish Effect’ on the competitive landscape. This effectively means that vendors will expand their product portfolios and push for upgrades especially in the high-end category to stimulate brand switches and consumer upgrades.

Currently, Huawei is listed in the Canalys ‘others’ table for smartphone vendor shipments. However, their market share is inching closer to fifth-placed Xiaomi, which recorded 9.1 million shipments in Q3 and held 14% of the market.

Huawei’s impact on the wider market is expected to accompany an increase in its sales, considering its recent Mate 60 sales figures. Launched quietly in late August, the Mate 60 Pro smartphone has seen tremendous success. Reports suggest that the company sold 1.6 million Mate phones in just six weeks, with nearly three-quarters of these being Mate 60 Pro devices.

A separate report by Counterpoint Research revealed a 3% YoY sales decline in Q3, but also noted a probable bottoming out of the market. The report specifically highlighted Huawei’s strength in Q3, with their Mate 60 Pro making a significant market impact and contributing to their 37% YoY sales growth.

“Although the Mate 60’s sales are mostly carried out through offline and online channels, the product has quickly garnered attention. Huawei is striving to ramp up production to meet the demand,” noted Counterpoint Senior Analyst Ivan Lam.

Both analyst firms positioned Honor, formerly a Huawei brand, at the top of the market for Q3. Canalys reported an 18% share of shipments for Honor and Counterpoint reported 18.3% of sales. They also listed Oppo, Apple, and Vivo in the second to fourth spots, although the order differed.

Canalys Research Analyst Lucas Zhong emphasized the importance of product competitiveness for growth, and suggested that if Huawei extends the new Kirin chipset into its low-to-mid-range portfolio, it could potentially disrupt the dynamics among the leading vendors. As such, the Chinese market landscape appears to be in constant flux, presenting possibilities for further shifts in market standings.



Source