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Xiaomi steal the Top spot away from Apple in in Chinese smartphone market

#Apple is no longer king of the #smartphone market in #China, according to research firm #Canalys.

For the second quarter of the year, local mobile phone vendor #Xiaomi bounced back with an estimated market share of 15.9 percent to steal the top spot away from Apple. Fellow Chinese vendor #Huawei grabbed second place with a 15.7 slice of the market. Demand for phones from both vendors pushed Apple down to third place with a market share of 14.2 percent after having been No. 1 for the last two quarters.

In the final quarter of 2014, the iPhone6 and iPhone 6 Plus helped Apple snag the top spot in China for the first time ever, according to Canalys, surpassing both Xiaomi and Huawei. Given that the retail price of the iPhone is greater than that of phones made by Chinese vendors, Canalys called this "an amazing result" at the time. Apple retained its dominant position in China for the first quarter of 2015, according to research firm International Data Corporation, with a market share of 14.7 percent and shipments of 14.5 million.

What's behind the change in ranks? The iPhone 6 and iPhone 6 Plus are now around 10 months old, and Apple's next-generation iPhones are likely to be unveiled in September. Demand for the current lineup typically tends to decline with each new quarter. And Apple's second quarter (fiscal third quarter) is usually its weakest. Plus, the Chinese smartphone market has become more saturated and sluggish, leading to greater consolidation among the top vendors. Both Xiaomi and Huawei offer mid-level and higher-end phones at consumer-friendly prices and have both launched new products.

"The China smart phone market continues to mature, remaining stagnant quarter-on-quarter," Canalys analyst Jingwen Wang said in a press release. "Competition among major brands has never been so intense. Huawei recorded the highest smart phone shipments in its history without compromising its product margin or profitability."

A report from Counterpoint Research forecast market share numbers of 15.8 percent for Xiaomi, 15.4 percent for Huawei and 12.2 percent for Apple, according to TechCrunch. Apple's smartphone shipments in China remained strong, according to Counterpoint, despite the seasonal downturn.

China remains a strong market for Apple. During the first quarter of the year, China officially passed the US as Apple's biggest iPhone market. During the second quarter, iPhone sales in China more than doubled, according to Apple. China is on track to add almost $60 billion in sales to Apple's overall revenues and almost $15 billion in operating income during 2015, Counterpoint said. However, Apple's CEO Tim Cook has acknowledged that China could see some "speed bumps" because of economic woes.
China is the world's largest smartphone market. But demand for smartphones has been slipping. Growth in the country's smartphone market throughout 2015 will be relatively flat, predicted IDC China.

"Smartphones are becoming increasingly saturated in China," Kitty Fok, managing director at IDC China, said in a statement in May. "China is oftentimes thought of as an emerging market but the reality is that the vast majority of phones sold in China today are smartphones, similar to other mature markets like the US, UK, Australia, and Japan. Just like these markets, convincing existing users as well as feature phone users to upgrade to new smartphones will now be the key to further growth in the China market."
Taking fourth place last quarter behind Apple was Samsung, which has seen its global smartphone sales and market share continue to drop over the past year. And in fifth place was Vivo, another Chinese mobile phone vendor known for budget-friendly devices. But the pressure is on among all smartphone vendors competing in China.

"Apple and Samsung have both increased their sales activities in the China market, expanding rapidly in channel coverage through flagship stores and small to medium size phone retailers respectively," Wang said. "Xiaomi is under immense pressure to maintain its top position in the quarters to come,

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