Smartphone shipments in the Chinese market have seen continued declines in recent years primarily because the penetration rate of smartphones in China has already surpassed 60%. Furthermore, smartphone hardware refreshes have gradually slowed down, with no killer app has emerged yet. Taken together, these factors have led to a decline in consumers’ replacement demand. While the COVID-19 pandemic began its spread last year, annual shipment of smartphones in the Chinese market for 2020 reached only about 330 million units, a 13.61% YoY decline.

Regarding the Chinese smartphone market in 2021, quarterly shipment underwent more than a 100% YoY increase for only the first quarter of the year due to the relatively low base for comparison in 1Q20. Starting from 2Q21, smartphone shipments saw YoY declines for each quarter of 2021. TrendForce, therefore, forecasts 345 million units in annual shipment for 2021 in the Chinese smartphone market, which represents a 4.55% YoY growth and a figure that falls below prior expectations. This disappointing performance can primarily be attributed to the shortage of components from the supply side, along with continued sluggishness from the demand side domestically.

As Honor confirmed its handsets will feature GMS (Google Mobile Services), Chinese smartphone brands look to dominate the overseas markets

Honor recently announced on its official Twitter account that it once again restored its partnership with Google and other suppliers. The Honor 50 series of handsets are equipped with GMS, which includes Google Play Store, Gmail, and YouTube, among other apps.

As a subsidiary of Huawei, Honor was previously unable to install GMS on its phones due to Huawei’s inclusion on the US Entity List, leading to a continued drop in Honor’s overseas market share. Now that it has been spun off from Huawei, Honor needs to restart negotiations with its suppliers. Initially, the company had a hard time expanding its presence overseas due to the lack of GMS functionality as well as the fact that it had to re-establish its global sales networks. After having received GMS authorization from Google, Honor is now able to compete with other Chinese brands such as Xiaomi, OPPO, and Vivo on an equal footing.

Shipping more than 10% of the domestic monthly total in smartphones, Honor has recently established a steady presence in the Chinese market. However, given the domestic market’s bearish trend in recent years, Honor, whose handsets now feature GMS functionality, will likely turn its focus to the European or Southeast Asian markets that Huawei once aggressively pursued.

（Image credit: Pixabay）