Local phone brands eye opportunity in high-end market as foreign firms lose luster

China’s smartphone manufacturers, which dominated the domestic market in 2018, are moving to seize the high-end market in 2019, an analyst said, as foreign high-end brands like Apple and Samsung are gradually losing their luster.

Shipments in China last year totaled 414 million units, down 15.6 percent year-on-year, according to a report from the China Academy of Information and Communications Technology, a research institute under the Ministry of Industry and Information Technology.

Technology and price advantages helped domestic brands succeed in the past. Chinese brands accounted for 89.5 percent of the total in 2018, according to the report, while Apple’s market share stayed same and Samsung’s fell dramatically.

Foreign high-end brands like Apple and Samsung, which formerly symbolized status in the Chinese market, are gradually losing luster compared with Chinese brands, the New York Times reported on Tuesday.

Since 2012, Chinese local brands have created new features and products that meet the needs of Chinese users, and their prices are much lower. At the same time, Apple didn’t take enough localization steps or adjust its products and strategies, said the New York Times report.

Market research firm Canalys estimates the Chinese smartphone market, the world’s largest, could shrink another 3 percent in 2019.

The Chinese market has transformed from an incremental market to a primary market. The main demand is to update phones, Jia Mo, an analyst at Canalys, told the Global Times on Wednesday.

Although it is now the end of the 4G technology cycle, it does not mean that the market outlook is dim, Jia said.

The high-end market offers growth opportunities, and Chinese companies led by Huawei are moving to seize these new opportunities.

The Honor sub-brand was the most popular line of phones under Huawei and it has become the current market leader, according to Canalys.