Xiaomi surpassed Apple to top China's first, Lei Jun: It's really not easy to win the first
Blue Whale reporter Zhang Han
China's mobile phone market, which has been sluggish for a long time, has finally ushered in a moment of recovery, driven by Xiaomi and Huawei.
On January 22, the China Academy of Information and Communications Technology released an analysis report on the operation of the domestic mobile phone market in December 2023 and the whole year. According to relevant data, in December 2023, the domestic market shipped 28.275 million mobile phones, a year-on-year increase of 1.5%, of which 24.2 million 5G mobile phones, a year-on-year increase of 4.2%, accounting for 85.6% of mobile phone shipments in the same period, and in 2023, the overall shipments of the domestic mobile phone market totaled 289 million units, a year-on-year increase of 6.5%, of which 240 million 5G mobile phone shipments, a year-on-year increase of 11.9%, accounting for 82.8% of mobile phone shipments in the same period.
Image source: Screenshot of the WeChat official account of the China Academy of Information and Communications Technology
Data from the China Academy of Information and Communications Technology also shows that in 2022, domestic mobile phone shipments will be 272 million, a year-on-year decrease of 22.6%, of which 5G mobile phone shipments will be 214 million, a year-on-year decrease of 19.6%, accounting for nearly eighty percent of mobile phone shipments in the same period.
Image source: Screenshot of the WeChat official account of the China Academy of Information and Communications Technology
In 2023, Huawei's strong return and Xiaomi's high-end strategy have begun to show results, both of which have injected new impetus into the already dormant mobile phone market.
At the same time as the data released by the China Academy of Information and Communications Technology, Lu Weibing, partner of Xiaomi Group and general manager of the Redmi brand, forwarded a data from an authoritative data agency on his personal Weibo account, saying that in December 2023, Xiaomi achieved 3.8409 million activations and a sales market share of 16.5%, surpassing Apple to rank first in the Chinese smartphone market in one fell swoop. Huawei and Honor also grew as fast, with 2,941,100 and 3,352,100 activations respectively, with a year-on-year increase of 59.2% and 12.4% in sales market share.
Subsequently, Lei Jun, the founder of Xiaomi, also forwarded this data report on the morning of January 23, and said, "Last month, Xiaomi jumped to the first place in the mobile phone market share in China!
Image source: Lei Jun Weibo
According to Xiaomi's previously released financial report data, in the third quarter of 2023, the gross profit margin of Xiaomi's smartphone business reached 16.6%, a year-on-year increase of 7.7%, and Xiaomi's smartphone achieved revenue of 41.649 billion yuan, accounting for 58.7% of Xiaomi's revenue.
In addition, in the context of continuous destocking, the overall inventory amount decreased by 30.5% year-on-year to 36.8 billion yuan, the lowest level in 11 quarters, and Xiaomi Group's cash flow resources continued to grow to 127.6 billion US dollars. The release of the Xiaomi 14 series of products also broke the previous record, and the results of Xiaomi's high-end have begun to appear.
The release of Huawei Mate 60 series products has stimulated consumers' desire to replace their phones to a large extent, and it has also set off a wave of replacements, although it has been in short supply when it was just released, but from the feedback from the current market, Huawei's production capacity problem has been improved.
According to Tencent's "Deep Web" previous interview with a Huawei core channel provider, compared with September and October 2023, the production capacity and stocking problems of Huawei's 5G mobile phones are being gradually solved, and Huawei nova12Pro will be equipped with a new Kirin 8000 processor, nova12Ultra is equipped with a Kirin 9000SL processor, and the nova series will also be equipped with Kirin chips as Huawei's mid-range machine series products, which also further confirms that Huawei's mobile phone supply chain is stabilizing. Regarding the above news, the Blue Whale financial reporter did not receive an official reply from Huawei. (See: Huawei's mobile phone production capacity climbs: Mate60 supply increases, low-end phones do not release 5G version)
In addition to high-end, domestic mobile phone manufacturers have a new force to work this new track to stimulate consumers' desire to change their phones. At the vivo developer conference on November 1, 2023, vivo released its self-developed AI large model and large model matrix, including 175 billion, 130 billion, 70 billion, 7 billion, and 1 billion five large models with different parameter scales. Xiaomi also has a layout, for example, Huawei Hongmeng HarmonyOS4 through the blessing of the Pangu large model, Huawei smart assistant Xiaoyi will have the ability of AI large model.
At the beginning of 2024, OPPO and Honor have also launched products equipped with AI large models. According to OPPO, OPPOFind X7 is the world's first mobile phone with 7 billion parameters of large language model applied on the device side, and has passed the new deployment of device-cloud collaboration; Honor said that it will do platform-level AI, reconstruct the underlying operating system with a large model, and integrate the understanding of natural semantics and the allocation of resources into the operating system, and the Honor Magic 6 series products will become the first batch of products equipped with Honor large models.
From the perspective of the global market, the recovery trend has also emerged. According to a report by market research agency Canalys, in the fourth quarter of 2023, the global smartphone market shipments increased by 8% to 320 million units, ending seven consecutive quarters of decline. According to The Paper, citing the views of IC design manufacturers, the worst period of demand has passed, and the market is gradually recovering, and in 2024, driven by the wave of replacement triggered by the introduction of terminal generative AI into the mobile phone market, it is expected to feel more obvious recovery momentum in the third quarter of next year.
In addition, according to the latest data disclosed by IDC, in 2023, Apple will surpass Samsung for the first time to become the company with the highest mobile phone shipments in the world, and Xiaomi will be in third place, with 146 million units shipped and a market share of 12.5%.
Image source: IDC