IDC: iPhone sales plummet in China in Q3 as Oppo, Vivo thrive

Oppo's R5. Image: TechStage/Flickr

Apple’s share of the massive smartphone market in China slid by more than a third in the latest quarter as homegrown vendors dominated the segment, according to fresh data from IDC.

The market research firm said iPhone shipments dropped to 8.2 million units in the third quarter of 2016, down from 12.4 million during the prior year, as Apple’s device claimed a mere 7.1 percent of the market.

Meanwhile, Chinese vendors Oppo and Vivo both doubled the number of phones shipped in the third quarter. Oppo was the top-selling vendor in the latest quarter, shipping 20.1 million units to claim 17.5 percent of the market, and Vivo shipped 19.2 million units to grab a 16.7 percent market share.

The news marks the first time Oppo and Vivo have overtaken Huawei in the Chinese market. Huawei’s market essentially held firm at 15.7 percent, good for third place, while fourth-place Xiaomi saw its share plunge to 8.7 percent after claiming 15.9 percent of the market last year.

The overall smartphone market in China grew 5.8 percent year-over-year and 3.6 percent sequentially in the third quarter, according to IDC estimates.

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Oppo and Vivo started shipping handsets in 2011 and have emerged as major players in the worldwide smartphone market in recent months. IDC said both ranked among the five largest vendors in the first quarter of 2016. The Chinese smartphone market was driven primarily by operator sales a few years ago, IDC noted, and vendors such as Xiaomi ascended as direct-to-consumer e-commerce sales became more popular in 2014.

But online sales in the region have stabilized, IDC said, paving the way for Chinese vendors who leverage offline channels to sell phones in the country’s smaller and mid-sized cities.

“OPPO’s success is not something that was achieved overnight. Back in the earlier years when vendors depended on operator subsidy to grow, OPPO was clear in its direction and focused on expanding its offline channels,” said Xiaohan Tay, a senior market analyst for IDC who covers Asia/Pacific. “It also had key strengths such as its VOOC fast charging technology and in the elegant design of its phones. This, coupled with its aggressive marketing tactics, helped it succeed in the market.”

IDC said it expects the Chinese smartphone market to continue to see both sequential and year-over-year growth in the fourth quarter, punctuating low single-digit year-over-year growth for 2016.