China's Domestic Smartphone Brands' Five-Year Push into the High-End Market: Honor, Xiaomi, OPPO, and vivo's Assault Who's the Next Huawei or Apple?

China's Domestic Smartphone Brands' Five-Year Push into the High-End Market: Honor, Xiaomi, OPPO, and vivo's Assault Who's the Next Huawei or Apple?In early 2020, Chinese smartphone brands Xiaomi, OPPO, vivo (later joined by Honor), collectively launched a concerted effort to break into the high-end market, a segment then dominated by Huawei and Apple. Five years later, let's review this battle and assess whether Honor, Xiaomi, OPPO, and vivo (referred to as "Honor, Xiaomi, OPPO, and vivo" or "HMOV") can claim the high-end throne or if they'll ultimately return to their starting point

China's Domestic Smartphone Brands' Five-Year Push into the High-End Market: Honor, Xiaomi, OPPO, and vivo's Assault Who's the Next Huawei or Apple?

In early 2020, Chinese smartphone brands Xiaomi, OPPO, vivo (later joined by Honor), collectively launched a concerted effort to break into the high-end market, a segment then dominated by Huawei and Apple. Five years later, let's review this battle and assess whether Honor, Xiaomi, OPPO, and vivo (referred to as "Honor, Xiaomi, OPPO, and vivo" or "HMOV") can claim the high-end throne or if they'll ultimately return to their starting point.

2020: The Era of the "Two Giants" in the High-End Market

According to IDC data, in the first half of 2020, Huawei and Apple firmly controlled the Chinese high-end smartphone market (wholesale price $600 USD/approximately 4300 RMB), together commanding 88.1% of the market share. Xiaomi, OPPO, vivo (Honor was not yet independent), Samsung, and other brands shared the remaining less than 12%. Huawei and Apple held 44.1% and 44% respectively, solidifying their positions as undisputed "two giants." Xiaomi, OPPO, and Samsung followed, but with significantly smaller market shares of 4%, 2.6%, and 2.5% respectively, lagging far behind Huawei and Apple. vivo's market share was even less than 2.9%. This indicated a challenging road ahead for HMOV in the high-end market.

2024: Subtle Shifts in the High-End Market Landscape

Fast forward to 2024. According to Canalys data, the global high-end smartphone market (over $600 USD) experienced a modest 5% year-on-year growth, yet demand remained strong, with Q3 shipments increasing by 15% year-on-year. The Chinese market presented a more complex picture. Apple's high-end market share rose from 44% in 2020 to 52%, an 8-percentage-point increase, further cementing its leading position. Huawei's market share dropped from 44.1% to 33%, a decrease of 11.1 percentage points. However, this still represents Huawei's best performance in the high-end market in recent years. After facing chip restrictions in September 2020, Huawei's smartphone business significantly declined, temporarily falling out of the top five before its return to high-end competition with the Mate60 series in August 2023.

HMOV's initial push into the high-end market largely aimed to fill the void left by Huawei's retreat. However, in Q3 2024, Huawei and Apple still accounted for a combined 85% of the market share, a mere 3.1-percentage-point decrease from four years prior. This signifies that HMOV's five-year efforts only managed to capture approximately 3% of the market share from Apple and Huawei. Specifically, Honor and Xiaomi held 5% and 3% of the high-end market share respectively, ranking third and fourth; Samsung held 3%, ranking fifth. Notably, excluding Apple and Samsung, the other three Chinese brands all achieved year-on-year growth.

Apparent Stagnation, Actual Breakthroughs

At first glance, HMOV seems to have failed to shake Apple and Huawei's market dominance. However, a deeper analysis reveals substantial progress in the high-end market. While market share growth remained limited, sales volumes increased significantly. The ambition of domestic manufacturers stems from the rapid growth and vast potential of the high-end market. According to Counterpoint Research data, the global high-end smartphone market grew by 16% year-on-year in 2023, while the overall market contracted by 1%; in the first half of 2024, high-end market revenue grew by 8% year-on-year, compared to a 4% growth in the overall market. China's growth was similarly significant. Canalys data shows that in Q3 2024, the Chinese high-end smartphone market (over $600 USD) reached 29.3% market share, a 3.7-percentage-point increase year-on-year.

For Apple and Huawei, maintaining or expanding market share is crucial. For latecomers like HMOV, stable market share translates to growth. Therefore, although HMOV's impact on Apple and Huawei's market share is limited, they have achieved remarkable breakthroughs in the high-end market themselves.

Specific Brand Performance and Sales Data Analysis

• Xiaomi: Counterpoint data shows that as of August 2024, global sales of the Xiaomi 14 series exceeded 6 million units, with cumulative sales nearing 8 million units. Cumulative reviews on Xiaomi's online store exceeded 3.3 million, a 79% year-on-year increase. Despite a 500 price increase to 4499 for the Xiaomi 15 series, sales still surpassed 1 million units, with growth exceeding that of the Xiaomi 14 series.

• OPPO: OPPO Find X7 series sales reached 402% of the previous generation's sales within 5 minutes of launch. The Find X8 series surpassed 1 million units in the Chinese market, breaking the series' sales record and helping OPPO rank among the top three in the over $500 USD high-end market in 14 countries and regions globally.

• vivo: vivo X100 series global sales exceeded 1.35 million units within 48 days; pre-orders for the vivo X200 series on the first day were 150% of the previous generation, with the Pro version reaching 200%.

• Honor: Honor experienced the fastest market share growth, ranking third in the high-end market in Q3 2024. While Honor was not independent in the first half of 2020, the strong growth of its foldable phone business was key to its success. In Q3 2024, Honor held a 21.9% share of the Chinese foldable phone market, second only to Huawei.

New Dynamics in the High-End Market: Slowing Foldable Growth, AI Effects to be Observed

Besides the 5G replacement cycle, foldable phones also fueled HMOV's high-end market growth. However, foldable phone market growth is slowing down. In Q3 2024, global foldable smartphone shipments declined by 1% year-on-year, ending six consecutive quarters of growth. Lack of diverse use cases, high prices, and the absence of a significant user experience advantage over traditional slab phones limit foldable phone adoption.

AI is considered the next potential driver of market growth. The development of generative AI offers smartphone manufacturers opportunities to enhance the competitiveness of their high-end products. However, current AI phone features are highly homogenous, and HMOV needs to build its own AI advantages.

Conclusion: A Long-Term Battle in the High-End Market

HMOV hasn't surpassed Apple and Huawei in the high-end market, but their efforts over the past five years haven't been in vain. Sales growth, market share improvements, and breakthroughs in niche segments like foldable phones all demonstrate their competitiveness. However, with the slowing growth of the foldable phone market and the increasing homogeneity of AI applications, HMOV still needs to exert greater effort to further advance in the high-end market. This high-end market competition is destined to be a protracted battle.