China's mobile phone market regeneration: OPPO "out of position", when will Apple, which is being approached by Huawei, stop falling?

Titanium Media APP

2024-04-24 08:57Posted on the official account of Beijing Titanium Media APP

With the release of the global smartphone data for the first quarter, it is clear that the continuous positive growth represents the industry coming out of a turbulent period. Among them, China, as one of the most competitive markets, is regarded as an industry-wide barometer.

On April 23, China's first-quarter smartphone sales data has been released, achieving a positive year-on-year growth in the second quarter. However, compared to the global growth of 7.8%, the figure in the Chinese market is only 1.5%, and the month-on-month growth is only 4.6%.

At the same time, Titanium Media APP also found that in a year, the pattern of the domestic mobile phone market has quietly changed. Among them, Huawei's growth momentum is still rapid, and the gap between its market share and Apple's is only 0.2%. Another domestic brand, OPPO, also fell behind quickly, falling from second last year to fifth in the same period this year, and the decline was second only to Apple.

图片来源：Counterpoint

It should be pointed out that under the superposition of AI and other factors, there will be great changes in the domestic mobile phone market this year. The high-end market has gradually returned to the era of Apple and Huawei, and the mid-range machine market has become the pursuit of more users in addition to cost-effective competition. In addition, there is another thing that is more exciting is that Apple's "decline" may not stop this year.

华为逼近苹果,OPPO"掉队"

The first quarter of each year is the vane of the new pattern of the mobile phone market. According to data released by research firm Counterpoint, China's smartphone sales in the first quarter of 2024 increased by 1.5% year-on-year. Ethan Qi, associate director of research at Counterpoint, said: "The recovery momentum seems to be building as China's smartphone sales continue to grow and grow by 4.6% q-o-q. ”

In the first quarter, due to the blessing of sales activities during the Spring Festival, it became a key factor driving the growth of domestic mobile phones. The data points out that the average weekly sales in the four weeks leading up to the Chinese New Year increased by 20% compared to a normal week. Titanium Media APP learned that online, Jingdong, Taobao and other platforms have opened relevant promotional activities during holidays such as the Spring Festival.

Offline, before the Spring Festival, channel providers have also launched a lot of discounts in order to clear inventory. "Now that the frequency of mobile phone updates is gradually accelerating, coupled with the changes in audience needs, we don't have to stock too much, take advantage of the holiday to ship quickly, and it doesn't matter if we make less money. A mobile phone merchant in Shenzhen told Titanium Media APP.

According to data released by Counterpoint, compared with the same period last year, three brands achieved growth in the first quarter of this year, namely Huawei, Honor and Xiaomi. By contrast, only Apple and Huawei saw growth last year. It is worth mentioning that in the context of the improvement of the mobile phone environment, the domestic market pattern has also undergone some changes. Among them, the most obvious changes are Huawei's high growth and Apple's decline.

In the first quarter, Huawei's ranking improved from sixth in the same period last year to fourth, and its market share returned to double digits, reaching 15.5%, a year-on-year increase of 69.7%, and the share gap with Apple was only 0.2%. Last year, the release of Huawei's Mate60 series sounded the clarion call for Huawei's return. Subsequently, the launch of new nova products further promoted Huawei's recovery in the mid-range market. Titanium Media APP got the news from a channel provider pointed out that some versions of the Huawei Mate 60 series are still in a state of price increase recovery, especially the Pro version, which is the hottest.

In contrast, Apple's 19.1% decline in the domestic market in the first quarter fell from the first place last year to the third place in the same period this year. Apple's decline has also been signaled early, with sales plummeting by more than 20% in the first six weeks of this year, and Apple's replacement demand is also slightly weaker than in previous years. Even price reductions have failed to boost sales.

iPhone15 series, shot by Titanium Media APP

"First, it faces stiff competition from the resurgent Huawei at the high end, while also being squeezed in the middle by aggressive pricing from companies like OPPO, vivo and Xiaomi. "Although the iPhone 15 is a great device, it doesn't have a major upgrade compared to the previous generation, so consumers are comfortable with the old generation iPhone for the time being." ”

Not only in the Chinese market, but also in the world, Apple's decline in the first quarter was also the largest among the top five, reaching 9.6%. Guo Tianxiang, research manager of IDC China, pointed out that this situation is likely to be due to a change in consumer psychology, Apple's successive generations of products have been upgraded to a smaller extent, and the gap with Android flagship products has narrowed, making it at least no longer the first choice in consumer psychology. Therefore, the effect after seeing the continuous price reduction since last year is not particularly obvious.

In addition to Apple, there is another brand that had a worse time in the first quarter of this year, and that is OPPO. Last year, it was second only to Apple, and this year it fell by 15.5%, ranking behind Huawei and ranking fifth in the domestic market. In February of this year, OPPO shouted the slogan of AI mobile phones, but judging from the performance of the terminal, it does not seem to have much of a boost.

Compared with the ups and downs of Huawei, Apple and OPPO, vivo's performance is relatively stable, although sales fell slightly by 0.4%, but jumped to the first place in China, up two places. Ivan Lam, senior analyst at Counterpoint, revealed that vivo's first place is mainly due to the strong sales of the Y35 Plus and Y36 in the low-end market and the S18 in the mid-range market this quarter.

Honor's growth is second only to Huawei, relying on the expansion of offline channels, rising from fourth last year to second this year. Xiaomi relied on the performance of the 14 series, with sales growth of 8.6%, and in the first quarter of this year, it also maintained its third position in the global market, with shipments increasing by 33.8%. However, under the fierce competition in China, although Xiaomi has grown, its ranking has slipped one place, mainly because Huawei has risen too fast.

The involution of the mid-range machine market has intensified

In the mobile phone market, there is a unique phenomenon, that is, there will be basically no brands like Apple, only focusing on the high-end flagship market. The approach of most brands is to seek profits and establish an image at the high-end, and to sell at the low-end and establish a basic market. Especially during turbulent periods, the low-end market has become the key to stabilizing the market. According to the statistics of relevant institutions, the domestic price range of 1500-3500 yuan occupies about half of the market share.

In the first quarter of this year, competition in the domestic mid-range market remained fierce, for reasons like the one just mentioned. It can also be seen from the data that the good performance of vivo and honor is also related to mid-range products to a certain extent. Counterpoint analyst Ivan Lam told Titanium Media APP, "More consumers are looking for mobile phones with higher configurations, and now domestic brands will also use 1999-2999 yuan as the price range to beat sales, and attract users through stronger configuration and cost performance." ”

As the two most talked-about brands, the competition between OnePlus and Redmi is white-hot. On the one hand, while ensuring the performance, the main products of the two hit the price to 1999 yuan, which is not an exaggeration to say that the price war. From the processor to the battery life, both brands give what they consider to be the highest sincerity. On the other hand, it is a competition in marketing and publicity, and both sides are also secretly competing, and each has its own meaning in words.

Friends who are familiar with OnePlus know that it used to be a very low-key brand and did not participate in war of words. It may be based on the pressure of the market, from the product to the marketing, it is more targeted. "If the product is not good, it is useless to change the name", "I am not willing to spend money on useless gimmicks to make products, and then frantically cut the configuration in the user's 'invisible place'", "Test it, compare it to see who is the real product and who is a fake", Li Jie, president of OnePlus China, shouted on the social platform, not mentioning friends in every sentence, but also mocking friends in every sentence.

Li Jie, president of OnePlus China, made some remarks

Of course, Redmi's side is also "not to be outdone", "8 is greater than 7, sales are greater than 3:1", "The preliminary pre-sale results are still very good, much better than those of friends in the same class", "It is recommended that friends take the right path, don't spend tens of billions of subsidies on marketing and water army", as the new person in charge of the Redmi brand, Wang Teng is also prickly.

Part of the remarks made by Wang Teng, general manager of the Redmi brand

Competition between brands benefits consumers in the short term. For mid-range machines, the general perception is that the performance is enough. However, in the current environment, in addition to performance, the quality of mid-range phones is also brought to the table, such as the material of the back cover of the mobile phone. However, the price war is always a double-edged sword, and while reaping sales, it also poses a higher test to costs.

Last year, the decline in the cost of components such as mobile phone storage gave domestic brands the confidence to roll. This year, with the recovery of upstream costs, in addition to price, brands still have to consider the user's experience, and who is more accurate than their knife skills, and can cut the configuration to meet the needs of consumers. After all, there is no so-called brand loyalty in this price segment, and if the service is not good for consumers, there will definitely be problems with the future growth space.

Guo Tianxiang, research manager of IDC China, also pointed out that the mid-end market will face the squeeze of high-end and low-end markets, the competitiveness of upward products is not as good as that of high-end products, and the downward price is more expensive than low-end products.

Huawei's high growth and Apple's decline, who will stop first?

In many previous articles, Titanium Media APP has proposed more than once that in the high-end market with higher profits, it will be the core of future competition and the key to growth, and Huawei's growth after its return has explained everything. "Although the high-end market share will still grow, with the return of Huawei, the competition will be more intense, and other Android manufacturers will also adhere to the high-end strategy and enhance their competitiveness in the high-end market through AI, folding screens, etc. Guo Tianxiang, research manager of IDC China, said.

In Counterpoint's forecast, the high-end market ($600-799) will grow by 17% year-on-year in 2024, with Apple and Huawei likely to lead the growth of the high-end market. Titanium Media APP expects that in a certain period of time, at least in the first half of this year, Huawei's high growth and Apple's decline will be the focus of attention of the whole industry.

图片来源：Counterpoint

Among them, for Apple, everyone is waiting for when it will stop falling. Counterpoint analyst Ivan Lam said, "Seeing the possibility of a recovery in iPhone sales, we are seeing a slow but steady improvement in weekly sales, so the momentum may be turning." For the second quarter, the iPhone is likely to launch new colorways, which, combined with aggressive sales plans, could bring the brand back to positive growth. ”

In the view of Titanium Media APP, Apple has its own unique competitiveness in the high-end market, and the gap between the two generations is too small, which is the reason why it is difficult to stimulate users' desire to change phones. However, all the "pseudo-innovation" complaints will dissipate in front of the price, and the data of shopping festivals such as 618 will not deceive people, and the iPhone is in the forefront or even dominates the list almost every time.

At the same time, Apple's investment and progress in AI will also be the key to stopping the decline of the iPhone in China. It is reported that at this year's WWDC, Apple will further reveal the news related to the embedded AI model of the iPhone, and I believe that this news will also boost the sales of the iPhone, especially this year's iPhone17 series, even if the appearance is still unchanged, AI will become a key factor for users to buy a machine.

As for Huawei, considering that its comeback was in the third quarter, such high growth as the first quarter is likely to continue in the second quarter. At present, due to well-known reasons, Huawei's production capacity is still climbing, and its product line is also being straightened out step by step. Last year, many of the users who purchased the Huawei Mate60 series were "nail households" in the Mate40 series era, as well as some Apple users. In the third quarter, Huawei's Mate70 series may not be able to replicate the explosive performance of the Mate60 series, and the newly released Pura70 series' low price increase in the secondary market and the breakage of some versions have been able to explain some of the situation.

However, even so, Huawei's growth in China continues, and its market share difference with the first place vivo is only less than 2%, and I believe that we will soon be able to see the moment when Huawei returns to the top. According to Counterpoint's forecast, China's smartphone market will see low-single-digit year-on-year growth this year, and Huawei will also be the core driver of the continued growth of the domestic mobile phone market as many brands remain in a downward channel.

In addition, from the data of the first quarter, titanium media APP also found that the gap between the top six manufacturers in market share is only three percentage points, while the share difference in the same period last year is more than 10%, the fierce competition can be imagined, which will also be a microcosm of the domestic mobile phone market this year.

In a situation where there is not much gap between everyone, every wrong strategic decision and product mistake will lead to the loss of the market. AI, a concept hovering around gimmicks and revolutions, will also become a key factor in determining the direction of the domestic mobile phone market. (This article was first published in Titanium Media APP, author | Du Zhiqiang, editor - Zhong Yi)

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