Sales gradually recovered after the market endured the off season of the first quarter. Chinese brands in the second quarter continued to enjoy strong domestic demand generated by telecom operators’ smartphone subsidies. At the same time, they also benefited from demand pickup in North America and the emerging markets. In sum, Chinese brands have become major growth drivers in global smartphone sales.

“The combined production volume of Chinese brands in the second quarter reached 139 million units, up 13.8% from the previous quarter,” said TrendForce smartphone analyst Avril Wu. “For the second straight quarter, the combined volume from Chinese brands was larger than the combined volume of the two leading international brands, Samsung and Apple. Furthermore, the volume growth rates of respective Chinese brands are expected to be above the global average in the third quarter.”

Apple in the second quarter posted an iPhone production volume of around 48 million units, up 13% from the previous quarter. This increase was attributed to the shorter base period and steady sales of iPhone SE, the latest mid-range model in the series. About 9 million out the total iPhone units produced during this quarterly period were iPhone SE.

“Sales figures of iPhone SE were not particularly exceptional because Chinese smartphone brands put up strong competition in the mid-range device market by lowering their prices,” said Wu. “Nonetheless, iPhone SE has helped prop up sales for Apple before the market launch of the next iPhone.

Samsung’s smartphone production volume in second quarter dropped slightly by 5% versus the prior quarter to about 77 million units. Before the release of the next flagship models, Samsung is depending on the Galaxy J series, which is noted for having a high cost-performance ratio, to sustain the overall sales.

Due to strong promotional efforts, sales of Galaxy S7 and S7 Edge were still brisk in the second quarter. The next flagship to be released by Samsung this year is Galaxy Note 7, which aims to attract consumers with cutting-edge hardware (e.g. 6GB LPDDR4, a biometric recognition system that scans iris patterns). The market expects a very tight match between Galaxy Note 7 and the next iPhone release in the third quarter.

Sales of LG’s flagship, G5, have been average at best. LG’s smartphone production volume for the second quarter amounted to around 17 million units. Due to the short base period, LG’s production volume grew over 10% quarterly. “The release of V20, LG’s flagship for the second half of this year, will be at the end of the third quarter at the earliest,” said Wu. “However, it will face stiff challenges from Samsung and Apple’s offerings.”

Huawei’s smartphone production volume in the second quarter increased 7.4% over the previous quarter, arriving at 29 million units. Huawei is secure in its position as the third-largest brand in the global smartphone market, but its domestic rivals are becoming more aggressive. The sales of Huawei’s flagship P9, which features a dual camera, may fall short of expectations as other Chinese brands release competitive products. Taking this into consideration, TrendForce has made downward correction to projection of Huawei’s annual smartphone production volume.

OPPO’s and Vivo’s smartphone production volumes were exceptionally high in the first quarter and continued to increase in the second quarter, with growth rates respectively at 15% and 8%. TrendForce expects both brands to maintain strong performances in the third quarter, with quarterly production volume increases exceeding 20%. On the whole, OPPO and Vivo have emerged as clear winners in this year’s smartphone market.

Wu pointed out several factors for OPPO and Vivo’s success: “Both brands concentrate their operations in China and their main strength lies in their management of their channels, which have spread out into the country’s third- and fourth-tier cities. They are able to maintain their growth momentum via the expansion of their channel networks.

Furthermore, OPPO designs its products to fit users’ needs and preferences, as in the case of its well-received flagship R9. Vivo on the other hand differentiate itself with special hardware upgrades. Vivo’s Xplay 5, which hit the market in the first half of 2016, was the first smartphone to carry 6GB of memory. In the second half of the year, Vivo will rely on X7 and X7 Plus with their unique camera feature to attract consumers.”

Lenovo’s smartphone production volume in the second quarter benefitted from the returning demand in overseas markets. While the brand is having difficulty increasing sales due to competitors’ aggressive pricing in the low-end and mid-range segments, it has generated interests with innovative products. Phab 2 Pro, for instance, is the first consumer smartphone to incorporate Google Tango, an augment reality platform. Moto Z series, which features the modular design, is set for market launch this September. How the market reacts to these innovations remains to be seen. TrendForce projects Lenovo’s smartphone production for this year to be under 60 million units.

Short base period also benefitted Xiaomi in the second quarter. The brand’s quarterly smartphone production volume grew by over 27% to 14 million units. A major sales contributor was Mi Max, a new phablet model that was released this May. Increasing competition and lack of physical retail network will have a negative impact on Xiaomi’s annual production volume, which is projected to be slightly below 60 million units as well.