China smartphone brand awareness increasing in China; Apple still holds top spot

The global smartphone market is slowing down and entering a mature period where growth will be limited. Mature markets such as Europe and North America in particular are expected to see smartphone growth in the single digits. Amid an increasingly competitive smartphone market in China, growth is expected to be more noticeable, and vendors such as Xiaomi, Huawei and Lenovo have gained a strong market share in the lower-priced smartphone segment. 

iPhone and Samsung hold the first position in brand awareness, whilst growth of Chinese brands is not negligible 

According to a new report from Avanti, the Shanghai-located consumer behaviour research division of Taiwan-based TrendForce, statistics show that when asked about smartphones without mentioning a specific brand, roughly half of local consumers in China show the most interest for Apple (50%) and Samsung Electronics products (25%). 

Products from China vendors however are making an increasingly extended impression with Chinese consumers. While there was growing demand for iPhone and Samsung products from 2012 throughout the second quarter of 2014, there was also increased demand for Xiaomi, Huawei and Lenovo products. Xiaomi saw the biggest increase, with a Top of Mind rate rising from 3% to 27% over 10 quarters for a 24pp increase. Huawei’s meanwhile jumped from 3% to 23% and Lenovo 8% to 18%. While such percentages are still not comparable to the rates consumers have for Apple and Samsung products, they do show clear signs of stemming quickly. 

Meanwhile, Nokia and HTC’s Top of Mind rates are decreasing, the Avanti statistics pointed out. Nokia dropped from the number one spot at 12% in first-quarter 2012 to 16% in second-quarter 2014, and HTC 23% to 16% over the same period, making them the two main vendors whose Top of Mind rates in China are dropping the most significantly. 

Figure 1. Top of Mind by Smartphone Vendor 

Source: TrendForce 

Chinese consumers more willing to purchase local products; Xiaomi holds number 3 spot 

There have been obvious changes from the first quarter in 2012 to the second quarter of 2014 in terms of what kinds of smartphones Chinese consumers want to purchase. iPhone used to have a 37% rate, which dropped as of the third quarter of 2013. Avanti believes this is because consumers felt the smartphone had lacking new innovation, and a smaller-than-desired screen (4-inches). However, due to the release of iPhone 5c and 5s Apple’s percentage increased to 22% in the second quarter, regaining the top spot. 

Samsung’s percentage came in second at 21%, which Avanti said it attributes to Samsung’s advertising in addition to the release of the Galaxy S5. Xiaomi meanwhile came in third due to increase in advertising and low-priced units while Huawei and Lenovo also saw increases and Nokia/HTC clear decreases. 

Consumers have become focused on product affordability 

In terms of pricing advantages, consumers in China feel that Xiaomi and Huawei to be the top two. Though iPhone and Samsung products are considered to have the most reliability and brand visibility, consumers are having similar opinions regarding to user-friendliness toward both brands with Xiaomi and Huawei, with some consumers believing that Xiaomi has surpassed the two international giants due to the vendor’s smartphone special features. 

Avanti also said that as growth in the overall smartphone market is cooling down, vendors are using low-priced units to gain market share while high-end units are no longer solely dominating. Vendors therefore expected to further develop low-priced and mid-range units, added Avanti. 

Figure 2. Changes in the brands consumers want to purchase for their next smartphone 

Source: TrendForce