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Chinese Smartphone Vendors Gain New Market Share

Global sales of smartphones to end users totaled 380 million units in the first quarter of 2017 -- that's a 9.1 percent increase over the first quarter of 2016, according to the latest market study by Gartner.

Gartner analysts believe that mobile phone buyers are spending a little more to get a much better device, resulting in the rise in average selling prices of smartphones across the globe.

The shift in buyer preference is positively affecting Chinese manufacturers -- such as Huawei, Oppo and Vivo -- in their strategy to build desirable features into devices at very affordable prices.

Smartphone Market Development

That being said, the combined market share of the Chinese vendors in the first quarter of 2017 accounted for 24 percent -- that's up by 7 percentage points year on year.

"The top three Chinese smartphone manufacturers are driving sales with their competitively priced, high quality smartphones equipped with innovative features," said Anshul Gupta, research director at Gartner.

Furthermore, aggressive marketing and sales promotion have further helped these value-based brands to take share from other brands in markets such as India, Indonesia and Thailand.

Samsung's smartphone sales declined 3.1 percent in the first quarter of 2017. "Although Samsung announced that preorders for the Galaxy S8 and S8 Plus are up 30 percent year over year, the absence of an alternative to Note 7 and the fierce competition in the basic smartphone segment are leading Samsung to continuously lose market share," said Mr. Gupta.

Sales of Apple iPhones were flat, which led to a drop in market share year over year. Similar to Samsung, Apple is increasingly facing fierce competition from Chinese brands Oppo and Vivo, among others, and its performance in China is under attack.

Huawei edged closer to Apple with smartphone sales amounting to 34 million units in the first quarter of 2017. Despite its P9 and P9 Plus being available for more than a year now, both smartphones continued to sell well, positioning Huawei as a dominant brand in the consumer market.

Oppo is continuing to catch up with Huawei. With a 94.6 percent increase in worldwide smartphone sales in the first quarter of 2017, Oppo achieved the best performance of the quarter and retained the number one position in China.

Meanwhile, Vivo sold almost 26 million smartphones and achieved a market share of 6.8 percent, which helped it achieve growth of 84.6 percent in the first quarter of 2017.

Outlook for Smartphone OS Penetration

In the smartphone operating system (OS) market, the battle is now clearly between Google Android and Apple iOS. With other OSs struggling for momentum, Android grew its share by 2 percent.

Growing acceptance of Chinese brands in the global markets, led in part by high-quality lower-cost smartphones, is driving Android OS dominance. Moreover, with Google's announcement of Android Go -- targeted at the entry-level smartphone market -- the OS is heading for continued worldwide growth.

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