As the largest market for smartphones, China has seen a decreased market share held by leading phone-makers including Apple and Samsung in 2016, with domestic brands being the biggest beneficiaries of these drop-offs, Economic Information reported on Dec. 28.
Samsung’s market share dropped by 14.2 percent in the third quarter of 2016, the company’s worst performance to date, which has mainly been attributed to widespread battery explosions of Samsung phones over the past year. But there’s no guarantee the brand will return to the top even if it survives its current crisis.
Meanwhile, Samsung’s foreign peer, Apple, has also failed to maintain its earlier performance. With steadily decreasing sales, China has lost its title as Apple’s second largest market. One factor in this decline may be insufficient innovation. Experiencing "iPhone fatigue," more and more Chinese customers are now moving to domestic brands.
Since the first quarter of 2016, shipments of Chinese smartphones for the first time surpassed the totals of Apple and Samsung. Statistics from global market intelligence provider TrendForce showed that production of Chinese smartphones reached 600 million in 2016, accounting for 45 percent of the global total.
In addition to marketing, Chinese brands are also devoting energy to new technologies. For instance, some Chinese phone-makers are already leading in technologies such as 5G, artificial intelligence, virtual reality and 3-D images.
With the rise of Chinese brands comes frequent patent litigation between Chinese producers and their foreign competitors. For this reason, analysts said domestic brands must systematically study international patent licensing and build their own patent portfolios as quickly as possible.