After Huawei suffered US restrictions and honored divestiture of Huawei, the smartphone market in China and the world has changed.

On the morning of April 29th, market research firm Canalys released the latest first-quarter report on China's smartphone market, showing that China's smartphone market grew for the first time in four years, with shipments reaching 92.4 million units in the first quarter of 2021, an increase of 27 percent over the same period last year.

Among them, vivo overtook Huawei to rank first in the Chinese market, accounting for 23% of the entire Chinese market, with 21.6 million units shipped, followed by OPPO, Huawei, XIAOMI and Apple Inc, respectively. Huawei's shipments fell 50% in the first quarter compared with the same period last year.

A few days earlier, market research firm Strategy Analystics released a report on global mobile phone shipments in the first quarter of 2021, showing that global smartphone shipments in the first quarter were 340 million, up 24% from a year earlier, the highest level since 2015, while Huawei has fallen out of the top five in the world.

Huawei goes down, other manufacturers go up

According to the latest report from Canalys, one year after the outbreak, the Chinese mainland smartphone market has finally returned to the level of the first quarter of 2019, with smartphone shipments reaching 92.4 million units, an increase of 27 percent over the first quarter of 2020.

Among them, vivo ranks first in the Chinese market, accounting for 23% of the entire Chinese market, with shipments of 21.6 million units, an increase of 79% over the same period last year. This was followed by OPPO, Huawei, XIAOMI and Apple Inc, with a market share of 22%, 16%, 15% and 13% respectively, and shipments of 20.6 million, 14.9 million, 13.5 million and 12 million respectively. Shipments of OPPO, XIAOMI and Apple Inc increased by 65%, 75% and 49% respectively in the first quarter compared with the same period last year, but Huawei's shipments fell 50% from the same period last year.

By contrast, the global smartphone market experienced the worst-ever decline in the first quarter of 2020 due to the global epidemic, including Apple Inc and most Chinese mobile phone manufacturers who were severely affected by temporary factory closures. Global smartphone shipments in the first quarter were 299 million, down 20.2% from a year earlier.

Among them, the Chinese smartphone market shipped about 66.6 million units, down 20.3% from the same period last year. Huawei shipped 28.4 million units in the first quarter, ranking first, and its market share increased from 35.5% in the same period last year to 42.6% in vivo, OPPO and XIAOMI, respectively. Apple Inc shipped 5.1 million units, ranking fifth in the domestic market.

It is worth mentioning that not only the Chinese smartphone market has changed, but the global smartphone market has also changed due to the changes in Huawei.

Recently, market research firm Strategy Analystics released a report on global mobile phone shipments in the first quarter of 2021, showing that global smartphone shipments in the first quarter of 2021 were 340 million, up 24% from the same period last year and the highest level since 2015.

In terms of manufacturers, Huawei mobile phones have fallen out of the top five in the world. In the first five cases, Samsung ranked first with 77 million units shipped, with a market share of 23%, an annual growth rate of 32%. Apple Inc shipped 57 million units in the first quarter, up 44% from 39 million in the same period last year, and ranked second with a market share of 17%.

XIAOMI's mobile phone shipments grew rapidly in the first quarter, with 49 million units shipped this quarter, an increase of 80% over the same period last year, while accounting for 15% market share, ranking third. OPPO ranks fourth with 38 million units shipped and 11% market share. The fifth place is vivo, which shipped 37 million units.

At Huawei's smart selection conference on the evening of April 20, Yu Chengdong, Huawei's consumer business, also admitted that Huawei's mobile phone business was affected after repeated sanctions by the United States. Huawei decided to sell cars to make up for the decline in profits caused by the impact on mobile phone sales.

Huawei's high-end market is temporarily stable.

"the market has returned to prosperity this quarter. Major suppliers are racing to grab the top of the market, with an unusually large number of smartphones released this quarter compared with the first quarter of 2020 or even the fourth quarter of 2020. Huawei's sanctions and divestiture of honor are hallmarks of the growth of this new market as consumers and channels become more open to alternative brands. "said Liu Anbo, an analyst at Canalys.

The Canalys report noted that both Vivo and Oppo had an excellent quarter, driven by the strong performance of products priced below Rmb2000 ($300m) in the parity 5G sector.

The vice president of mobile communications said: "for Huawei's competitors in China, the affordable 5G sector is an easy fruit, but the real battlefield is the high-end ($500 or more) market. Huawei still has a solid position among Android vendors this quarter with products such as Mate 40 Pro and Nova 8 Pro. What cannot be ignored, she believes, is how fast Oppo, Vivo and XIAOMI, with their competitive flagship product portfolios, are catching up in this lucrative sector [the high end of the market].

Success in the high-end market will not only enhance the brand image of Oppo, Vivo and XIAOMI among high-end consumers, but also lead to higher service revenue, which is becoming a key source of revenue for these companies.

"the fast-growing number of 5G users is another key factor driving device replacement, with the number of 5G users exceeding 350 million by the end of the first quarter," Liu added. Operators are more determined than ever to migrate 4G subscribers to 5G. Many provincial operators offer 5G fees only when consumers start new contracts or try to renew existing 4G contracts. We expect that from this year, 5G smartphones will become the practical choice for most Chinese consumers to replace their devices. "

Yesterday, Huawei released its first-quarter results, which also confirmed the market situation. According to the results, Huawei achieved operating income of 150.057 billion yuan in the first quarter, down 16.92% from the same period last year, but the company's net profit for the current period was 16.847 billion yuan, an increase of 26.63% over the same period last year. At the same time, the company's gross profit margin increased 9% to 46%.

A certified public accountant, who spoke on condition of anonymity, said that one reason for the increase in net profit was that Huawei gave up its low gross margin business compared with the same period a year earlier, keeping profits on the rise, that is, divesting the glorious low gross margin business.