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TrendForce:iPhone Loses Ground in China Market, Second Tier Smartphone Market to be Dominated by Chinese Brands

16 August 2013 Consumer Electronics

According to the most recent survey conducted by AVANTI, a research division of TrendForce, the iPhone now leads Samsung in the "brand recognition" category by only 1%. In the "most anticipated smartphone purchase" and "most used smartphone brand" categories, the Cupertino company is shown to be vastly behind the Korean giant, 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.    

Samsung Enjoying Further Brand Recognition, HTC and Nokia Suffer from Popularity Decline

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 the first quarter of 2012. For the second quarter of this year, approximately 79.6% 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 approximately 80.6% 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 1%.   

Chinese Smartphone Brands Gain Further Acceptance, Xiaomi Seizes Market through Aggressive Pricing Strategy

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 799 RMB "Red Rice" smartphone, which is currently garnering a lot of positive attention in the industry, has already managed to amass 7 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.

iPhone Enjoys Highest Brand Loyalty, HTC Users Contemplating Switching to Samsung

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% are revealed to be interested in eventually purchasing a smartphone from Samsung.  

In regards to purchasing criteria, Chinese consumers tend to favor a product's usability and price over the brand's actual reliability. Only 17% 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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