China has seen exponential growth in smartphone adoption, with shipments surging at an estimated 199% year-on-year in the second quarter to 42 million units.
This figure also represents a 32% increase over the previous quarter, according to Canalys.
This is the second consecutive quarter of record breaking volumes in a single market. China accounted for 27% of the 158 million global smartphone shipments, compared to 16% for the United States.
Notably, growth in China was heavily driven by domestic vendors, while international vendors struggled to keep pace, the Canalys says.
While Samsung maintained its overall leadership position in China with a 17% market share, this reduced sequentially as volumes were flat and as several local vendors closed the gap.
ZTE, Lenovo and Huawei were the second-, third- and fourth-placed vendors, ahead of Apple. The three vendors made up a third of the market, and achieved growth of 171%, 2,665% and 252% year-on-year respectively.
Collectively, domestic Chinese vendors shipped 25.6 million units - up 518% year on year - and accounted for 60% of the market. By comparison, international vendors grew by a more modest 67% to 16.7 million units.
Apple fell to fifth place in China. While its shipments were up 102% year-on-year, they were down 37% compared to Q1 2012.
Canalys research director for China, Nicole Peng said the rise of the domestic tier-one brands has been aided by a number of factors.
“Their reactiveness to market demands and deep understanding of local consumer behavior and preferences have been key in helping them surpass international peers in the fast-evolving Chinese market,” Peng said.
“Local tier-one vendors have worked hard in recent quarters to greatly improve their brand resonance among consumers and to expand and enhance their relationships and influence within operators.’
But the tier-two vendors — the likes of Oppo, K-Touch and Gionee — have also stamped their mark, boosting smart phone shipments into tier-three and tier-four cities, predominantly through the open channels.
As feature phone vendors, they already have established partnerships and strong brand awareness. These domestic vendors are making significant progress transitioning their portfolios and customer bases to be more focused on smart phones, Peng added.
Nokia and Motorola both lost significant ground in China, with Nokia’s volumes down 47% on Q2 2011.
“Among the international vendors, only HTC managed an outstanding performance in mainland China. Its shipments grew 389% year-on-year to reach 1.8 million units for the quarter,” said Jessica Kwee, Canalys Research Analyst. “Its success this quarter is heavily based on the strong performance of Desire V series devices, designed with the local China market in mind, underscoring the importance of tailoring propositions to local consumer preferences.”
Android has become a dominant mobile OS, running on 81% of the smart phones shipped in China in the second quarter. On a global basis, the Google platform continued to grow in significance, surpassing 100 million quarterly smartphone shipments for the first time and reaching two-thirds share of the market.
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