China goes orbital for smartphone shipments


Stellar growth sees China take 27% of global smart phone shipments, powered by domestic vendors

As Apple falls and Android rises, China is experiencing stellar growth in the global smartphone shipment race, with its domestic manufacturers taking the lion's share of the volume, according to new research.

China has taken a hefty 27% marketshare in global smartphone shipments in the second quarter 2012, out of the 158 million global smartphone shipments, compared to 16% for the US. Android is the Chinese platform of choice, accounting for 81% of Chinese shipments, Canalys stated.

Canalys published its final second quarter 2012 country-level shipment estimates this week. Results show that China saw phenomenal growth of 199% year on year and 32% over the previous quarter.

In total, more than 42 million smart phones were shipped into the channel in China in the second quarter, representing the second consecutive quarter of record breaking volumes in a single country market.

Notably, growth in China was heavily driven by domestic vendors, while international vendors struggled to keep pace.

While Samsung maintained its overall leadership position in China with a 17% market share, this reduced sequentially as volumes were flat and as several local vendors closed the gap. ZTE, Lenovo and Huawei were the second, third and fourth placed vendors, ahead of Apple, making up a third of the market. They achieved growth of 171%, 2,665% and 252% year on year respectively.

Collectively, domestic Chinese vendors shipped 25.6 million units, representing a growth of 518% and 60% of the market. By comparison, international vendors grew by a more modest 67% to 16.7 million units.

Apple fell to fifth place in China. While its shipments were up 102% year on year, they were down 37% compared to the first quarter 2012.

Said Canalys research director for China, Nicole Peng: 'The rise of the domestic tier one brands has been aided by a number of factors. Their reactiveness to market demands and deep understanding of local consumer behaviour and preferences have been key in helping them surpass international peers in the fast-evolving Chinese market. Local tier one vendors have worked hard in recent quarters to greatly improve their brand resonance among consumers and to expand and enhance their relationships and influence within operators.

'But the tier two vendors — the likes of Oppo, K-Touch and Gionee — have also stamped their mark, boosting smart phone shipments into tier three and tier four cities, predominantly through the open channels,' continued Peng. 'As feature phone vendors, they already have established partnerships and strong brand awareness. These domestic vendors are making significant progress transitioning their portfolios and customer bases to be more focused on smart phones.'

Nokia and Motorola both lost significant ground in China, with Nokia's volumes down 47% on Q2 2011.

Noted Jessica Kwee, Canalys research analyst: 'Among the international vendors, only HTC managed an outstanding performance in mainland China. Its shipments grew 389% year on year to reach 1.8 million units for the quarter. Its success this quarter is heavily based on the strong performance of Desire V series devices, designed with the local China market in mind, underscoring the importance of tailoring propositions to local consumer preferences.'

Android has become a major growth driver in China, running on 81% of the smart phones shipped in China in the second quarter 2012. On a global basis, Android continued to grow in significance, surpassing 100 million quarterly smart phone shipments for the first time and reaching two thirds share of the market.

Commented Pete Cunningham, Canalys principal analyst: 'Growth in Android volumes of 110% far outpaced growth in the overall market of 47% year on year, heavily driven by Samsung, which saw Android volumes of over 45 million, contributed to by a full and broad portfolio of products, from its high end flagship Galaxy S III down to its aggressively priced Galaxy Y and Galaxy Mini. Its sponsorship of the London Olympics and subsequent product placements are sure to attract new customers to ensure that Q3 delivers a strong performance.'

Samsung retained its gold medal position in the global smartphone market with a 31% share, followed by Apple and Nokia once again. Huawei and ZTE were unable to push in on the global top five with shipments of their own branded devices. HTC moved up to fourth place, though, just ahead of RIM, which shipped 8.5 million units in the calendar quarter.


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