Apple loses ground in China smartphone market

According to the latest survey by Avanti, a research arm of TrendForce, iPhone only leads Samsung in the "brand recognition" category by only one per cent. In the "most anticipated smartphone purchase" and "most used smartphone brand" categories, Apple is shown to be vastly behind Samsung and reveals a continuously declining popularity. Not surprisingly, Huawei, Lenovo and Xiaomi, all of which are doing reasonably well in China, appear poised for positive growth in the upcoming quarters. HTC and Nokia, by contrast, are noticeably struggling, and will likely see their popularity further threatened by the rise of Chinese branded smartphones, stated the market research firm.

In part due to the progresses made in the area of innovation, Samsung has been able to rely on its strong high end smartphone sales to make up for the performance in the mid to low end sectors. Its brand image, notably, has been improving steadily in China since 1Q12. For 2Q13, about 79.6 per cent of the Chinese participants referred to the Korean company when asked of the smartphone brands that "immediately come to mind." This puts it very close behind Apple, which was mentioned by respondents roughly 80.6 per cent of the time. Interestingly, in both the "most used smartphone brand" and "most anticipated smartphone purchase" categories, Samsung's percentage share has risen on a consistent basis, whereas Apple's has fallen continuously since mid to late 2012.

A particularly interesting finding of Avanti's survey that is worth mentioning here is the apparent struggles experienced by HTC and Nokia. Even though the two rank behind only Apple and Samsung in the "brand recognition" category, neither appears to be as popular now as they were a year before. In the "most used smartphone brand" category, for instance, Nokia has slid from first place in 2012 to third place this year. HTC, likewise, fell behind Huawei and is now positioned in the fifth spot. In this year's "most anticipated smartphone purchase" category, Nokia and HTC are in fourth and fifth place, respectively. While Huawei still ranks behind HTC in the aforementioned category, the difference between the two's rankings is now less than one per cent.

According to TrendForce's recent Q2 global smartphone shipment report, the Chinese smartphone makers Huawei and Lenovo have both managed to make it to the global top five at third and fourth place, respectively. In the "brand recognition" category, Xiaomi, Lenovo and Huawei are positioned at the fifth, sixth and seventh spots, whereas the foreign brand Nokia ended up at fourth place.

In the "most anticipated smartphone purchase" category, all three of the aforementioned Chinese smartphone brands showed steady growth compared to the same period a year ago. The slight decline spotted in Xiaomi's percentage share in the "most used smartphone brand" category is suspected to be caused by the company's shortage of components as well as decreased shipment levels.

With its impressive specs and low price, TrendForce believes Xiaomi will not only retain its loyal customers, but also see improvements in the area of brand recognition. In the "most anticipated smartphone purchase" category, the percentage share held by Xiaomi is noticeably larger than its actual market share. Xiaomi's "Red Rice" smartphone, which is currently garnering a lot of positive attention in the industry, has managed to amass seven million pre-orders so far. TrendForce expects Xiaomi's aggressive pricing strategy to affect the average smartphone prices in the market, and in turn intensify the competition among mid end smartphone makers. How well Xiaomi's actual sales go will depend on the stability of the company's future shipments as well as its ability to secure important memory components.

In the "brand loyalty" category, iPhone, Samsung and Xiaomi are all in the top three positions, whereas Nokia and Huawei are at a distant fourth and fifth place. Among the owners of the smartphone brands that rank below the top five, the proportion of those hoping to switch to Samsung is noticeably greater than those who want to switch to an iPhone. Of the HTC users surveyed, 33.8 per cent are revealed to be interested in eventually purchasing a smartphone from Samsung.

In regards to purchasing criteria, Chinese consumers tend to favour a product's usability and price over the brand's actual reliability. Only 17 per cent of the respondents surveyed showed any concern for the hardware specs of a smartphone. The results, in some ways, indicate that with the smartphone product reaching its maturity, mid-ranged models with high CP values may become increasingly more popular. Making such smartphones might be helpful to manufacturers hoping to expand market share.

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