Photo/Shetuwang

Nov. 22 (NBD) – Statistics from market research institute GfK shows the third quarter of 2018 saw China's mobile phone market log a year-on-year decrease by 18 percent in terms of sales volume and mobile phones sales in China drop by 9 percent over the previous year.

This marks the first time both sales volume and sales have suffered a decline in over 10 years during which China's mobile phone industry enjoyed rapid development.

According to GfK, the increased cost risks in the upstream supply chain of related electronic products and the sluggish retail and consumption market have caused cut-throat competition in China's mobile phone market.

Several insiders told the 21st Century Business Herald that the dive in the sales volume of China's mobile phones could be also attributed to the prolonging of mobile phone's replacement cycle and the difficulties in increasing the number of mobile phone users.

Jia Mo, a Research Analyst from technology market analyst firm Canalys, said the fall in China's mobile phone market will continue until next year but the market will see a new growth pole with the advent of the 5G era by the end of 2020.

Despite the downward pressure in China's mobile phone market, competitions among mobile phone titans and small and medium-sized mobile phone makers still remain fierce. 

A report released by Counterpoint Research indicates domestic brands - Vivo, OPPO, Huawei, Honor and Xiaomi - dominated the top five positions in China's mobile phone market in terms of sell-through for the third quarter of 2018. The five companies occupied more than 78 percent of the total market share in China's mobile phone market. And Apple ranked sixth after Xiaomi with a market share of 7.7 percent.

Li Rui, Chief Executive Officer of Nordwave Research, told the 21st Century Business Herald that the future will see the top five mobile phone vendors compete for the top three positions in China's market. 

Xiaomi will be challenged by Vivo and OPPO in the low-end mobile phone market since Vivo and OPPO are presenting more diversified products. Huawei, Vivo and OPPO will pose a threat to Apple in the high-end market. At the same time, Xiaomi is trying to march in the high-end market as well, added Li Rui.

Under such circumstances, small-sized mobile phone manufacturers like Meitu, Smartisan and Qihoo 360's mobile phone brand are exploring a way out by adjusting their development strategies. 

Meitu began to partner with Xiaomi while Smartisan and Qihoo 360 started to enhance operation efficiency through team work. 

In the new round of competition, small-sized mobile phone vendors are under tremendous pressure since they will compete for a total market share of only about 10 percent, stated Jia Mo.

Specifically speaking, challenges faced by these small vendors will be related to marketing, technologies, as well as financing.

Li Rui pointed out that small brands could partner with mobile phone giants, continue the previous development paths, seek transformation, or enter specific phone markets so as to stand out from the competition.

Email: wenqiao@nbd.com.cn