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TrendForce points out that the total production volume of all Chinese brands for 2016 was 629 million units, surpassing the volume of 519 million units jointly from Apple and Samsung. Going forward, Chinese smartphone makers together are expected to account for around 50% of the global market in 2017, posing even greater challenges to other international brands.
Samsung had a difficult 2016 in the smartphone market and the company did not achieve its annual shipment target due to the fallout from the battery defect in Galaxy Note 7. Samsung’s global market share also contracted steadily, from 28% in 2014 to 25% in 2015 and then to 23% by the end of 2016.
Much of the market share loss was attributed to the stiff competition from Chinese brands across all market segments, from high-end to mid-range and low-end models. Samsung’s production volume registered its second consecutive year of decline in 2016, falling by 3.3% compared with the prior year. Nonetheless, the brand was still the leader in the annual global ranking. TrendForce anticipates that Samsung’s smartphone business will keep struggling this year as well and will likely post another drop in the annual production volume.
Apple’s iPhone production volume fell 11.5% annually to 209 million units in 2016. The general reception to the major iPhone releases last year – iPhone 7 and 7 Plus – was average at best as both models lacked innovations that excite consumers. Though Apple was second place in 2016 ranking with 15.3% of the global market share, the market share difference with the third-place Huawei was just around five percentage points. The general market expectation for 2017 is that the next iPhone release, which is the 10th anniversary edition (and currently labeled “iPhone 8”), will shoulder the burden of driving sales for Apple. However, TrendForce’s latest projection indicates single-digit growth for this year’s iPhone production volume.
LG’s production volume performance not particularly impressive during 2016 as its flagship G5 did not gain significant traction in the market upon release during the year’s first half. The brand’s performances in mid-range and low-end segments were also generally lackluster. As a result, LG was only able to increase its production volume by 10% annually to 75 million units.
Huawei’s heavy investments on R&D, particularly within its chip subsidiary HiSilicon, continue to pay off dividends in terms of obtaining in-house application processors and the accumulation of IPs. The Chinese brands therefore have the strength to expand into overseas markets with products of comparable qualities to those from its international competitors.
At the same time, it is able to avoid legal challenges to its technology patents. Huawei currently uses in-house, Kirin-series application processors for all its high-end devices and continues to work with Qualcomm and MediaTek in the mid-range and low-end device segments. Huawei also has developed good relationships with major telecom companies worldwide. After surpassing the 100 million mark in 2015, Huawei’s production volume increased by 21.3% annually in 2016 to reach 131 million units, giving the brand a secured third-place spot in the ranking.
OPPO and Vivo are two Chinese smartphone brands that burst into the market in 2016 with successful sales strategies and higher product specifications. Added together, OPPO and Vivo’s production volume for last year amounted to 180 million units. Furthermore, OPPO and Vivo respectively displaced Lenovo and Xiaomi to take the fourth and fifth place in the worldwide ranking.
The return of Nokia-branded products in the smartphone market is going to be one of the highly anticipated events in the early 2017. Last May, Foxconn’s subsidiary FIH Mobile acquired the Nokia brand and its mobile phone business from Microsoft and at the same time entered a brand licensing and patent agreement with HMD Global Oy (HMD). Supported by Foxconn’s vast resources, Nokia is expected to release a new device at the start of this year, generating new buzz in the market.
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