TAIPEI — Apple’s share of China’s smartphone market has dropped for the first time as consumers in the world’s most populous nation show a growing acceptance of locally made handsets, according to market research firm IDC.
The four biggest Chinese companies in the ranking saw their share increase to 57 percent in 2016 from 46 percent in 2015, IDC said in a press statement. In 2016, the world’s largest smartphone market grew by 9 percent annually and 17 percent in the fourth quarter from the third quarter, according to IDC.
Last year was the first time that Apple saw an annual decline in the Chinese market, according to IDC. The world’s largest company saw its iPhone shipments slip to 44.9 million units in 2016 from 58.4 million units in 2015 as its market share dropped 4 percentage points to 9.6 percent.
China’s leading vendors in 2016 were Oppo, Huawei and Vivo. Oppo sold 78.4 million units in the China market, topping Huawei's 76.6 million.
"Increased dependence on mobile apps has led to consumers to seek phone upgrades, thus helping drive the large growth in the fourth quarter of 2016," said Tay Xiaohan, senior market analyst with IDC Asia/Pacific's Client Devices team. "In lower-tiered cities, there was a similar demand by consumers, which Oppo and Vivo met by aggressively pushing mid-range smartphones in these cities."
China assembles smartphones for companies ranging from Apple to ZTE. Local brands such as Huawei have aimed to grab a larger piece of the domestic market by designing their own chips and using innovative marketing strategies that appeal to local tastes.
Apple may bounce back in China. IDC said it believes most Apple users in China are waiting for the next iPhone that will be launched this year, helping to push Apple to sales growth in the market during 2017. Apple's 10-year anniversary iPhone will also likely attract some of the high-end Android users in China to convert to an iPhone, according to IDC.
Last week, Apple released its results from the first fiscal quarter, which ended on December 31. While the company reported record quarterly revenue of $78.4 billion, it posted $16.2 billion in Greater China sales during the quarter, compared with $18.37 billion in the first quarter of 2016 for a year-on-year decline of 12 percent.