Huawei secured the leading position in the Chinese smartphone market

According to a new report by Counterpoint's Market Monitor service, Huawei secured the leading position in the Chinese smartphone market during the final quarter of 2017 (+8 percent YoY) and for the full year 2017 it registered 19 percent YoY growth. This allowed the world's third-largest smartphone brand to capture 19 percent share of the smartphone market, its highest ever for a full year.

James Yan, Research Director at Counterpoint Research said that "For Huawei, the bulk of the growth was driven by its sub-brand Honor which contributed to more than 60 percent of its shipments during the year. This made Huawei's Honor brand the number one smartphone brand in online channels in China ahead of Xiaomi, during the full year. However, the growth of 'Huawei' branded phones slowed down as the mid-to high-tier phones faced tough competition from OPPO and Vivo, and towards the end of 2017 from Xiaomi, with its increasing offline presence and promotional activities."

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While, OPPO and Vivo were the second and third largest brands in China in Q4 2017 and for the full year 2017, capturing a combined more than a third of the smartphone market.

The report said that for the full year 2017, OPPO and Vivo were able to grow faster than the overall market and increased their market share to 18 percent and 17 percent respectively.

However, the research firm said that during Q4 2017, they saw OPPO and Vivo's growth slowing down considerably, as they faced tough competition from Xiaomi and Huawei. On the other hand, Xiaomi made a strong comeback in 2017 with a more focused portfolio and aggressive channel expansion strategy beyond online channels to rekindle demand in its home market. Xiaomi's market share jumped to 14 percent and it was the fastest growing brand (+31 percent YoY) during Q4 2017. This helped Xiaomi to grow its annual market share to 12 percent, inching past Apple.

The report also pointed out that Apple's market share in China dropped for the first half of 2017 but started picking up during the second half of 2017. Apple's strategy to sell competitively priced older iPhone models such as customized iPhone 6 32GB for the China market drove some uptick for Apple. In addition, we are seeing sales of the new iPhone X and some 8 series models beginning to gain some traction during Q4 despite the high-ticket prices.

Commenting on Apple's performance and opportunity, Associate Director, Tarun Pathak, highlighted, "China saw some strong traction for the iPhone X demand in December but still lower than expected, mostly due to supply issues or the high price. The Chinese holiday season in Q1 2018 will be a critical period, setting the tone for the vendor's full-year outlook.

Furthermore, China still has a large iPhone base on the older iPhone 6/6Plus models. These iPhone 6/6s users are potential upgrades this year. However, the high-ticket price for the X could sway most of them towards competing devices or settle their upgrades to the relatively cheaper iPhone 7 models."