IDC expects that in the second quarter of 2018, China's smart phone market will recover. Under the pulling effect of major brand new products, user demand will be released to a certain extent, and the market capacity will show an upward trend. However, with the prolonged replacement period and the lack of technological innovation in the industry, consumer demand for replacement has weakened. In 2018, China's smart phone shipments will be lower than last year's overall level.
Specifically, the Chinese smartphone market in the first quarter of 2018 presented the following characteristics:
* From the shipping scale, the domestic smart phone market experienced a significant decline in the first quarter, with a 16.0% year-on-year decline continuing the negative trend in the fourth quarter of 2017. The main reason for the decline in shipments was that manufacturers focused on digesting old inventory in January and February to prepare for the listing of new aircraft, and to reduce market expectations based on actual sales in 2017. In addition, new products in the first quarter were released in mid-to-late March. Vendors consciously controlled the pace of shipments to cope with changes in the market and did not conduct large-scale delivery.
* From the brand perspective, the head concentration effect has been further strengthened. The top five brands accounted for 84.2% of the market in the first quarter. Domestic manufacturers accurately grasp the pace of the market, continue to increase technology research and development efforts, extend the use of mobile phone scenes, pay attention to human-computer interaction experience, and strengthen the collaborative upgrade of hardware and software ecology. However, the gap between the brand behind and the head has further widened, the market share has been continuously diluted, and even the situation of being left behind appears to be under pressure to survive.
* From the perspective of channel changes, new retail models continue to emerge and traditional business models have been shaken. From the independent e-commerce platform and offline retail store, to the combination of online and offline full-category comprehensive stores, to the open ecological store where hardware, new retail, and the Internet are deeply integrated, the new retail model attracts a large number of passengers. At the same time, it enables users to find suitable usage scenarios in the process of experiencing products, and increase purchase willingness and repurchase rate.
* From the point of view of consumer demand, the replacement period of smart phones has been further extended, the improvement of product quality and the lack of functional innovation have weakened the demand for replacement at the consumer end. Currently, products on the market are still facing the problem of homogeneity, lacking the core technologies and guiding forces that drive large-scale replacements, and it is difficult for users to purchase their products.
The first-line brands consolidate their own advantages, accurately grasp the pace of the market, and open the battle of harvest.
Faced with the declining trend of the smart phone market in 2018 and fiercer brand competition, the front-line brands have competed for user resources and started the battle of harvesting while stabilizing their dominant position.
* Huawei ranks first in the domestic market, continues to maintain its leading edge, and uses full screens, photographs, and glass bodies as selling points, and launches several new products focusing on the core functions of mobile phones at the mid-end price point. The product lines of the Huawei Group are well-positioned and have a sound layout for high, medium, and low-end product lines, forming a brand-driven company that is fully driven by Mate, nova, glory, and smooth play. In addition, the landing of Huawei Smart Living Museum in the first quarter also demonstrated its accelerated layout of smart ecology, and improved the compatibility of different brands of smart ecology to attract more customer groups.
* OPPO and vivo continued to maintain the second and third positions, ended the early period of rapid expansion and high investment mode, stabilized the pace, and returned to rational development. Both manufacturers introduced new products with full screen, AI and other functions in March. Among them, OPPO R15's new color matching, smart beauty, and screen fingerprint unlocking with vivo X21, Jovi's smart assistant, etc. are generally recognized by users. Single rate is extremely high. With the deep integration of intelligent technologies, OPPO and vivo have achieved a steady increase in new product prices and shipments.
* Xiaomi maintained rapid growth in the first quarter and fully opened offline channels to stimulate new growth drivers. Through the optimized delivery of marketing channels, utilizing the advantages of online and offline diversified channels, combined with the new retail model to enhance brand awareness, penetrate more target users and further increase brand share. At the same time, with the help of the brand-new Mix series to enhance product positioning at the product end, we closely adhere to concepts such as technology, innovation, and cost-effectiveness to increase user stickiness. The news of Xiaomi's upcoming IPO has also caused widespread concern. IDC believes Xiaomi will have a further impact on the smart phone market after its listing. On the one hand, it will speed up the pace of going out of the sea, stabilize its dominant position in the Southeast Asian market and explore more emerging markets; on the other hand, it will also invest more resources in the domestic market to speed up product structure adjustment, smart ecological construction, channel model changes, etc. work hard.
* Apple shipments increased slightly year-on-year, but shipments rose by more than 20%, mainly due toiPhoneX's high price after the listing of the overall price of the brand to promote the role of the firm, solidified Apple's position in the ultra-high-end market. In the first quarter, the potential of the iPhone X continued, and the iPhone 6 (32G version) in the mid-range segment was able to contribute to the shipping scale of the overall brand through a reasonable channel layout and a competitive price advantage.
Future products should be more in line with consumer demand, combined with intelligent ecological extension of application scenarios, to achieve software and hardware collaboration upgrade.
Looking ahead, Jingxi, a senior analyst at IDC China, believes that in the face of fierce competition among manufacturers and the willingness to change users, mobile phones should be more in line with consumer demand. At the same time, upgrading of technology services should also focus on the appearance and the scene. Intelligent experience, to seize the user's core appeal for the product. Manufacturers should be guided by user needs, extend the application scenarios of products with intelligent ecology, focus on interactive experiences, and achieve collaborative upgrade of hardware and software ecosystems.
IDC expects that after experiencing the first quarter's warm-up, domestic brands will make further efforts in the second quarter, and the centralized launch of flagships will stimulate user demand. The battle of first-line brands' harvest will be intensified, and the second- and third-tier brands will face challenges in survival.