The Chinese smartphone market has experienced a year-on-year decline of 11% in Q1 2023, with shipments dropping to 67.6 million units, the lowest Q1 since 2013, according to a report by Canalys research. Apple took the top spot with a 20% market share, shipping 13.3 million units, thanks to the popularity of the iPhone 14 series. OPPO (including OnePlus) ranked second, with a 19% market share, shipping 12.6 million units, boosted by the new smartphone launches of OnePlus. Vivo and HONOR secured third and fourth places, shipping 11.3 million and 9.7 million units respectively. Xiaomi stabilized its market position in fifth place with a shipment of 8.5 million units.
Despite the ease of COVID-19 restrictions and the rebound of economic vitality, the Chinese smartphone market has experienced its fifth consecutive quarter of double-digit decline. The total retail sales of consumer goods in Mainland China in Q1 2023 increased by 5.8%, but demand for communication products faced a decline. The pandemic has affected consumer behavior in the medium to long term, with consumers tending to spend their income on necessary expenses and maintain certain savings, showing a rational attitude towards the consumption of electronic goods.
Vendors need to offer convincing products to stimulate upgrades, said Lucas Zhong, Research Analyst at Canalys. In such fierce competition, vendors should avoid any price war and focus on providing differentiated value propositions. Vendors should further establish their competitive advantage over others by enhancing user experience and improving brand loyalty.
While there will not be a significant recovery of the Chinese smartphone market in 2023, Canalys has observed signals of consumer confidence returning, which will be a good time for vendors to implement their latest branding and product strategies, said Amber Liu, Analyst at Canalys. This year will be an important year for vendors to balance their market share and profitability, while also accumulating technological and brand foundations. While adjusting expectations for 2023, the smartphone industry has already turned its attention to 2024 growth plans, seeking further breakthroughs in hardware technology, and implementing more application scenarios in ecosystem construction and AI algorithm capabilities.