Progress reflects industrial upgrading
Chinese smartphone makers account for more than 70 percent of the domestic market, a Chinese official said Wednesday, with domestic industry leaders Huawei and Xiaomi grabbing more market share from foreign tech giants Apple Inc and Samsung Group.
The market share is partly a reflection of China's efforts to upgrade its manufacturing sector, Zhang Feng, a spokesman for the Ministry of Industry and Information Technology, said at a press conference held in Beijing.
China's smartphone shipments reached 208 million units in the first half of 2015, up 7.5 percent from a year earlier, according to data from the China Academy of Telecommunication Research.
Chinese smartphone makers Huawei Technologies Co, Xiaomi Inc and Lenovo Group have all achieved sales growth of more than 30 percent year-on-year in the first half of 2015, and their market share continues to expand, Shen Danyang, a spokesman for the Ministry of Commerce, told a regular media briefing Tuesday.
In the second quarter, Xiaomi led the Chinese smartphone market with an 18 percent market share, followed by Huawei with 16 percent and Apple with 12 percent, according to consultancy IHS Technology.
Improved product quality and design, stable relations with telecom operators, and low prices have made Chinese smartphone makers more competitive than their foreign rivals, analysts said.
"Domestic brands dominate China's low-end and mid-range market due to their improved product quality and price advantages," Zhu Dalin, an analyst with IT research firm Analysys International, told the Global Times Wednesday.
But if Chinese companies want to grab more market share, they will need to move further into the high-end market, which is still dominated by Apple and Samsung, he said.
Apple's iPhone sales in China (including Hong Kong and Taiwan) surged by 85 percent year-on-year in the second quarter. That helped its China revenue jump by 112 percent from a year earlier to $13.23 billion during the period, according to its financial report released late Tuesday.
"We remain extremely bullish on China and we're continuing to invest," Apple CEO Tim Cook said at a conference call Tuesday, noting that he believes China will become Apple's largest market in the future.
"The strong sales of iPhones here is not only because of the phone itself; in China, it is also a sign of social or economic status," Zhu said.
But analysts have concerns that China' smartphone market is nearing saturation, and that further growth momentum will mainly come from Chinese users upgrading from their existing phones.
Gong Xingli, a 37-year-old businessman in Beijing, recently switched his Samsumg smartphone for a Huawei premium model.
"My Samsung phone has poor battery life and sometimes shuts down by itself," he told the Global Times Wednesday.
Gong said a colleague of his recommended Huawei based on a balance of quality and reasonable pricing, so he decided to have a try.
"Huawei has a good reputation both at home and abroad and does not just target the low-end market, so it will not make me feel embarrassed when I bring it out on business occasions," Gong said.
Zhu said top Chinese brands such as Huawei and Xiaomi have already made some progress in tapping into the high-end market and challenging Samsung and Apple.
Shipments of Huawei's mid- and high-end smartphones rose by 70 percent year-on-year in the first half of 2015, and revenue from the sector rose by 399 percent during the same period, Huawei announced Wednesday.
