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China smartphone shipments continue decline in third quarter as former Huawei mobile brand Honor reclaims top vendor ranking - Yahoo Finance

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Honor, the mobile brand spun off from Huawei Technologies in 2020, emerged as China's biggest smartphone vendor in the three months through September, when the industry's largest market saw a second consecutive quarter of modest declines in spite of the launch of major new 5G handsets.

Third-quarter smartphone shipments on the mainland fell 5 per cent year on year to 66.7 million units, according to a report on Thursday by tech market research firm Canalys. That compares to a 1 per cent decline in global smartphone shipments during the same period, as estimated by Canalys in a separate report last week.

Honor reclaimed the top smartphone vendor spot in mainland China last quarter with an 18 per cent market share and total shipments of 11.8 million units. That comes more than a year since Honor last led the market in the first quarter of 2022, with a 20 per cent share and total shipments of 15 million.

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Analysts attributed Honor's ascent to the top of China's smartphone vendor rankings to its diverse portfolio of handsets, bricks-and-mortar retail expansion through partners, and release of competitively-priced new models.

Shoppers are seen inside one of Honor's smartphone retail stores in mainland China. Photo: Shutterstock alt=Shoppers are seen inside one of Honor's smartphone retail stores in mainland China. Photo: Shutterstock>

"Besides covering all price bands, Honor has been expanding its offline store presence across all tiers of Chinese cities and investing in improved brand awareness," Canalys research manager Amber Liu told the South China Morning Post on Thursday.

The performance of Honor last quarter showed that China's smartphone market may have already bottomed out, which Canalys saw as a signal of gradual demand recovery.

The devices that have drawn more consumers to Honor on the mainland include its newly launched X50 and 90-series 5G handsets that cost 1,399 yuan (US$191) and 2,499 yuan, respectively, according to Counterpoint Research.

Honor's focus on more affordable mid-range products, while at the same time offering promotional prices to both retailers and consumers, is a strategy that "has proven to be effective", Counterpoint research associate Alicia Gong wrote in a report published on Thursday.

A woman compares the iPhone 15 Pro, left, with Huawei Technologies' Mate 60 Pro 5G handset at an Apple Store in Shanghai on September 22, 2023. Photo: Reuters alt=A woman compares the iPhone 15 Pro, left, with Huawei Technologies' Mate 60 Pro 5G handset at an Apple Store in Shanghai on September 22, 2023. Photo: Reuters>

The other top-ranked China smartphone vendors last quarter, according to Canalys, included Oppo, Apple and Vivo - each with a 16 per cent market share - as well as Xiaomi Corp, with a 14 per cent share.

Although Honor posted a 1 per cent year-on-year decrease in annual growth in the third quarter, the company fared better than its main competition, according to Canalys data. Oppo, Apple and Vivo saw their annual growth stumble last quarter by 10 per cent, 6 per cent and 26 per cent, respectively. Xiaomi had flat growth in the same period.

Canalys said Apple's third-quarter performance in China's premium handset segment received a boost from the launch of its iPhone 15 series, even as US-blacklisted Huawei saw brisk demand for its Mate 60 Pro and top-of-the-line Mate 60 Pro+ 5G handsets powered by an advanced mystery chip.

"In the ultra-premium segment, we expect neck-to-neck competition between Huawei's Mate 60 Pro handsets and the iPhone15 Pro and Pro Max," Canalys' Liu said.

Huawei grew its third-quarter sales by 37 per cent from a year earlier, according to Counterpoint, which attributed that gain to the strong domestic interest in the Shenzhen-based company's Mate 60 Pro series.

China's smartphone market is expected to swing back to growth next year, according to Xiaomi president Lu Weibing.

The country's smartphone vendors are expected to ship more than 280 million units to the domestic market in 2024, Lu said. He expected that would result in a 5 per cent overall gain for Chinese vendors in the global smartphone market next year.

Honor already plans to relaunch in India through a licensing deal with a local company and aims to start manufacturing in the South Asian country by early next year. Honor reportedly stopped selling its smartphones in India last year owing to limited marketing budget and less prudent portfolio management.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2023. South China Morning Post Publishers Ltd. All rights reserved.

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