China’s Smartphone Market Declines 3% as vivo Regains Leadership

Mainland China’s smartphone market has experienced a **3% year-on-year decline**, marking its second consecutive quarter of contraction, according to research from **Omdia**. This downturn reflects ongoing challenges in the world’s largest smartphone market, although analysts suggest that the decline may be stabilizing.

In a notable shift, **vivo** has reclaimed the top position with an **18% market share**, having shipped **11.8 million units** during the quarter. **Huawei** closely follows with **10.5 million units**, while **Apple** has made a comeback into the top three, shipping **10.1 million units**. **Xiaomi** and **OPPO** round out the top five, each hovering around the **10 million mark**. This competition at the top indicates an increasingly tight race among leading brands.

Market Trends and Vendor Strategies

Despite the contraction over the past two quarters, **Lucas Zhong**, an analyst at Omdia, indicated that the narrowing decline suggests a shift towards stabilization. He noted, “Although the market has contracted for two consecutive quarters, the narrowing decline indicates that the shipment fluctuations triggered by the government subsidy program at the beginning of the year are coming to an end.”

Vendors are adopting a more cautious approach to shipments, which helps maintain healthier inventory levels and avoid the overstock issues that have affected previous quarters. Zhong anticipates that activity will pick up again in **Q4 2024**, driven by new flagship launches, the **Double 11 shopping festival**, and the possibility of further government subsidies.

Huawei’s Shift to HarmonyOS

As **Huawei** continues to rebuild its momentum, a significant focus is on its software transformation. Following the launch of the **Pura X**, Huawei has preinstalled **HarmonyOS 5.0** across most of its new devices. While this transition presents short-term challenges in optimization and user experience, the goal is to strengthen Huawei’s ecosystem and reduce reliance on Android. Zhong remarked that “consistent execution will likely strengthen Huawei’s ecosystem moat, particularly in an increasingly saturated market.”

In the mid-range and entry-level segments, vendors are competing fiercely for differentiation. New releases such as the **HONOR X70**, **Redmi Note 15 Pro**, **vivo Y500**, and **OPPO A6** are designed with consumer priorities in mind, focusing on larger batteries, better durability, and enhanced protection. Many of these models now feature batteries of **7000mAh or larger**, along with improved water, dust, and drop resistance—reflecting the rising component prices and changing consumer expectations.

Future Outlook and Innovations

Looking ahead, **Hayden Hou**, Principal Analyst at Omdia, forecasts modest overall growth for 2025, supported by ongoing government assistance and strategic product refreshes. He explained that local vendors are pursuing differentiation through design, battery capacity, and camera performance while expanding AI-driven features to enhance user experience. Chinese consumers remain particularly receptive to AI-capable smartphones, and innovation within the country continues to shape how domestic brands approach global expansion.

Despite economic challenges, Omdia believes the Chinese smartphone sector is poised for healthier growth. Inventory discipline, targeted innovation, and renewed consumer confidence are expected to contribute positively to the market in the upcoming quarters. The **Q3 2024** results serve as a reminder to global vendors that recovery in the smartphone industry is not linear, but progress is indeed being made.