Apple and Samsung's market share has both declined. Why are domestic mobile phones rising?

In the first quarter of this year, Apple and Samsung, two giants, both failed in the Chinese market and suffered a Waterloo in market share. In contrast, domestic mobile phones delivered a brilliant report card. This is inseparable from the technological innovation and service efforts of domestic manufacturers in recent years, but it is not easy to maintain the long-term prosperity, and it is necessary to comprehensively improve the control ability of the industrial chain.

Domestic mobile phones are flourishing both inside and outside

The latest data released by market research firm Gartner shows that Samsung shipped 78 million units in the first quarter of this year, down from 23.3% in the same period last year to 20.7%; iPhone shipments were about 52 million units, and its market share dropped from 14.8% to 13.7%. The overall market share of China's three major smartphone manufacturers is 24%, with Huawei in the first place, followed by OPPO and vivo. Among them, OPPO's market share is about 8%, almost doubling year-on-year. The shift in buyer preferences is having a positive impact on Chinese manufacturers such as Huawei, OPPO and vivo.

Meanwhile, the China smartphone quarterly tracking report released by market research firm IDC shows that in the first quarter of this year, the three major domestic brands Huawei, OPPO and vivo led the Chinese smartphone market, with Apple only ranking fourth. This is the fifth consecutive quarter since the first quarter of 2016 that domestic mobile phones have outperformed international brands such as Apple and Samsung in the Chinese market.

In terms of channels, the "JD China Brand Development Report" released by JD.com also shows that in the past three years, the sales of brands such as Hammer, OPPO, vivo, and Xiaomi on JD.com have increased by an average of more than 60 times, and domestic brand smartphones have risen strongly.

Not only leading the domestic market, domestic mobile phones have also achieved remarkable results in overseas markets, accounting for more than 60% of the market share in the Asia-Pacific region, more than 30% in Africa, the Middle East, and Latin America, and more than 20% in the relatively developed European and American regions. Huawei, ZTE, and TCL have successively entered the mature high-end markets represented by Europe and the United States, while Xiaomi, OPPO, vivo, Gionee, and Meizu focus on emerging markets represented by India, Southeast Asia, and the Middle East, while Transsion occupies the primary market represented by Africa.

Why the counterattack?

The counterattack of domestic mobile phones is not without trace.

First, the technology is advanced and more practical, hitting the pain points of consumers. Looking at the leaders in the domestic market share in the past three years, they all have come up with functions that are closer to the usage scenarios of Chinese consumers: Xiaomi MIUI has more than 1,000 usability improvements, Huawei has launched Kirin chips, dual cameras and large batteries for long battery life, OPPO has launched flash charging, photo taking and split-screen technology, Gionee focuses on built-in security encryption chips, and vivo's HiFi sound quality and soft light selfie, all of which accurately grasp consumer needs.

Second, the price is more affordable. Compared with Apple and Samsung, which are priced at more than 5,000 yuan, the average price of domestic phones is about 2,500 yuan, and they cover high-end, mid-range and low-end models, which is more advantageous for consumers of different classes. In addition, with various performance "black technology" configurations, domestic phones are completely superior in terms of cost performance.

The third is to win reputation by serving and attracting fans. For example, Honor has set up a forum for European consumers to exchange comments and comments, and has achieved a quick reply speed of 3 minutes and a high reply rate of 98%, which has won the hearts of European consumers. In China, Huawei, OV and other domestic brands have strong offline online store support and after-sales strength, which is unmatched by Apple and Samsung.

Although the past was good, it is not easy to maintain prosperity

As the saying goes, "Thirty years on the east side of the river, thirty years on the west side of the river", the replacement cycle of the mobile phone industry is even shorter. The once popular "China Cool Alliance" now only has Huawei on the list. If domestic mobile phones want to maintain their long-term prosperity, they still face many challenges.

First, the core components are "strangled" by foreign manufacturers, and domestic mobile phones generally have the embarrassment of "lack of chips and screens". This is the case with Huawei's "flash memory gate" and the delayed release of Xiaomi Note 2. The core and high-value components are controlled by foreign manufacturers such as Samsung, Toshiba, and Qualcomm. Not only are they "starved for marketing", but most of the profits are also taken away.

Secondly, domestic mobile phones generally face the situation of "losing money and making money". From the annual reports of major manufacturers, it can be seen that although the shipment volume has increased significantly, the profit is far from that of Apple, Samsung and other manufacturers, and the profit margin is pitifully low. The curse of "volume and profit inversion" needs to be solved urgently.

The past can only represent history, and the future still needs to be created by ourselves. At the important node of consumption upgrade in the domestic mobile phone market, in addition to paying attention to various "black technologies", domestic manufacturers need to fundamentally improve the competitiveness of the entire industry chain, increase R&D investment, enhance the control of key technologies, further promote brand building, make up for their own shortcomings, and further capture the high-end market.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.