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On July 29, third-party research organizations Canalys, IDC, and Counterpoint released their 2024 Q2 Chinasmart phoneMarket report. All three reports show that China's smartMobile phone marketThe overall demand showed signs of recovery. Among them, Q2 2024 achieved year-on-year growth, and in terms of ranking, all three companies showedvivoRanked first, taking into account the Q1 data, vivo won the championship in the domestic smartphone market share in the first half of this year.

At the same time, third-party institutions predict that the Chinese mobile phone market will face more intense competition in the second half of the year, and generative AI functions will become more popular.

Vivo ranks first as market recovers

Judging from the data from the three reports, the overall demand in China's smartphone market has maintained a recovery trend.

Counterpoint data shows that China's smartphone sales in the second quarter of 2024 increased by 6% year-on-year; IDC data shows that in the second quarter of 2024, China's smartphone market shipments were approximately 71.58 million units, a year-on-year increase of 8.9%, continuing its growth momentum; Canalys said that China's smartphone shipments increased by 10% year-on-year, returning to the level of 70 million units.

From the ranking point of view, although there are differences in the rankings of the three companies from second to fifth place, all three research institutions show that vivo ranks first. Combined with the Q1 data, it can be said that vivo has won the first place in the domestic smartphone market share in the first half of this year.

Canalys datavivoShipments increased by 15% year-on-year, firmly securing the top spot in the Chinese market.OPPORanked second, followed by Honor, Huawei, Xiaomi, and Apple became "Others"; IDC data shows that vivo topped the list of China's smartphone shipments, followed by Huawei, OPPO, Honor, Xiaomi, and Apple became "Others"; Counterpoint's top five are vivo, Apple, Huawei, Xiaomi, and Honor.

Canalys research analyst Zhong Xiaolei said: "Local vendors have demonstrated their market leadership, occupying the top five spots in the Chinese mainland market for the first time in history.

Among domestic brands, the reason why vivo can firmly hold the first place is related to the hot sales of its many products. IDC said that the hot sales of vivo's many new products helped vivo win the first place in market share in multiple price segments, and its sub-brand iQOO alone accounted for 5.5% of the overall market share, becoming the most successful sub-brand of all manufacturers.

It is understood that this is not the first time that vivo has ranked first among domestic brands. In 2021 and 2022, vivo ranked first in all products. It can be said that it has ranked first in the domestic mobile phone market share for three consecutive years.

The deeper reason why vivo can continue to maintain the first place in market share lies in its long-term corporate values, which make the four direct stakeholders, users, employees, business partners, and shareholders happy. In making users happy, it is through continuous technological innovation, constantly using "blue technology" to meet and even exceed user expectations. For example, "200 million telephoto ultra-clear, even VIP on the top of the mountain", "can also be used in Antarctica, no worries about battery life." These functional experiences exceed user expectations.

In addition to vivo, Huawei's data in the second quarter is also noteworthy, with a year-on-year growth of more than 40%. Even IDC data shows that Huawei's year-on-year growth in the second quarter of 2024 was 50.2%. Analysts said that although Huawei's external restrictions continue to tighten, Huawei's supply capacity continues to improve, and the gap with Apple continues to narrow in the market above RMB 4,000.

Apple has fallen out of the top five in the Chinese mobile phone market in the second quarter of 2024. Canalys research analyst Zhong Xiaolei said that Apple is facing growth pressure in the Chinese market and is actively working to optimize channel management.

The second half of 2024: Challenges and changes

Counterpoint believes that in the third quarter, Chinese mobile phone brand manufacturers will update their flagship product lines and release mobile phones in both straight and folding forms, which will further intensify market competition.

At the same time, IDC China Research Manager Guo Tianxiang also said that we should not be blindly optimistic about the market development in the second half of the year and next year. The market began to recover in the second half of last year, which led to a year-on-year increase in shipments, which means that the market in the second half of this year will not have a greater rebound space than in the first half of the year. The pressure of rising costs will also bring more challenges to manufacturers.

Regarding generative AI, Counterpoint said that mobile phone brands have begun marketing generative AI features to establish a differentiated image of their products in the high-end and mid-range markets. Mobile phone brand manufacturers will provide more innovative features based on generative AI to Chinese smartphone users in the second half of 2024.

Canalys senior analyst Zhu Jiatao said that manufacturers are accelerating the construction of their own AI infrastructure, self-developed models and application ecosystems, using this as the core driving force for future competition.

However, Guo Tianxiang still believes that AI is unlikely to become the main driving force for consumers to change their phones in the short term. Performance, imaging, appearance, battery life and price are still the main factors consumers consider when choosing a phone.

This article is from NetEase Technology Report. For more information and in-depth content, follow us.