China smartphone market rebound strongly in Q1 2021, fuelled by the success of 5G devices and the eased pandemic in the country.
We estimate that 5G contributed 80% of China’s total smartphone shipments this quarter. Behind the 5G success, it is the relentless push from Chinese government, the generous promotion from local operators, and most importantly the declining price of new 5G smartphones offered by vendors.
OPPO and vivo led this quarter in terms of 5G shipments, followed by Xiaomi and Apple. These four vendors all have high 5G penetration rate in their portfolio. Smaller domestic vendors have different stories. Other than Realme and OnePlus (OPPO’s two sibling brands) and the high-end focused Meizu, micro-vendors are suffering from the shortage of mainstream 5G chipsets. Some of them have turned heads to UniSoc and launched several entry level 5G devices under RMB1000 (USD154).
In addition to 5G, OPPO, vivo, and Xiaomi are also arguably the biggest winners in Android camp from Huawei’s drop in the country. Their combined volume soared +87% YoY this quarter. Compared with smaller vendors, these players:
- Suffering less from the component constraints. Their volume-generating series (OPPO A series, vivo’s Y series, and Xiaomi’s Redmi series) were not impacted from the supply shortage in general. This is partly due to their scale and partly due to their early preparation triggered by Huawei’s US ban.
- Being more ambitious to capture Huawei’s share in domestic market. Under the current US ban, Huawei can hardly compete with vivo, OPPO, and Xiaomi on 5G line-ups. Huawei’s retreat coupled with Honor’s early ramp-up make 2021 H1 a golden window of opportunities for these vendors.
But questions remain, especially whether the strong growth will sustain in China market. Major vendors need to pay special attention on inventory management in the following months, while smaller vendors unfortunately will continue to suffer from the supply shortage as well as the rising cost on chipsets and other key components in the upcoming quarters.
Our latest report China Smartphone Vendor & OS Marketshare : Q1 2021 has been published. Clients are welcome to download the report. Meanwhile, if you are interested in the topic and have any questions, feel free to press the “ask author” button in the link here.