In this industry note, we explore recent changes in the smartphone market in China, which accounted for roughly one-third of worldwide mobile sales in 2016. International smartphone brands such as Apple and Samsung dominated China’s smartphone market in its early stages. Then, Xiaomi and Huawei, two Chinese brands, changed the story. In 2015, Xiaomi and Huawei were ranked No. 1 and No. 2, leaving Apple in third position and even squeezing Samsung out of the top 5. Just one year later, OPPO and VIVO (OV), two unfamiliar brands that had nevertheless been cultivating the market for years, overturned the ranking again. OV occupied the No. 1 and No. 3 positions in 2016, pushing Apple to fourth place. Samsung’s market share shrank even further. With the variety of players came a range of supply chain integration strategies and distribution channel models that raised interesting questions about the inherent risks and rewards and how they would affect this changing market going forward.
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