In an unexpected turnaround for China's mobile market, Huawei Technologies Co. and Xiaomi Corp. have significantly contributed to an 11% increase in the country's smartphone shipments in October. This growth, as reported by Counterpoint Research, marks a departure from several quarters of declining sales, hinting at a potential market rebound.
Huawei's sales skyrocketed by an impressive 83% in October, primarily fueled by the release of its Mate 60 series. This surge was attributed to Huawei's innovative approach, notably their development of a self-engineered advanced chip. This move, seen as a strategic response to U.S. sanctions limiting chip shipments to China, has garnered widespread attention and consumer demand. Xiaomi also reported a substantial 33% increase in sales during the same period. However, details regarding Apple Inc.'s performance in the Chinese market during this time were not specified.
The release of Huawei's Mate 60 series, with its 'Made in China' chipset, has not only driven the company's growth but also created a positive ripple effect across its other models. "The clear standout in October has been Huawei, with its turnaround on the back of its Mate 60 series devices. Growth has been stellar," stated Counterpoint China analyst Archie Zhang. Despite these advances, some production challenges might still persist for Huawei, potentially impacting its capacity to meet the burgeoning demand.
China's smartphone industry had previously been grappling with a prolonged period of contraction, exacerbated by inventory surplus and the economic impact of Covid Zero lockdowns. The situation has since seen a reversal, with leading chipmakers like Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. reporting an end to inventory adjustments and a resurgence in orders.
The robust sales of Huawei's Mate 60 series and Xiaomi's 14 series, which garnered over one million orders since its late-October launch, have infused optimism into the market. This resurgence could pose challenges for Apple, which has relied on China for a significant portion of its revenue in recent quarters.
Analysts, including those from IDC, now anticipate a year-on-year growth in sales for the fourth quarter, potentially ending a streak of ten consecutive quarters of declining shipments. This forecast aligns with the observed market dynamics, where the Chinese phone market is witnessing a revival, primarily driven by local manufacturers Huawei and Xiaomi.
The shift in China's smartphone market dynamics underscores the resilience and adaptability of local manufacturers in the face of global supply chain challenges and geopolitical tensions. As these companies continue to innovate and respond to consumer demands, they are poised to play a crucial role in shaping the future trajectory of the global smartphone industry.
