Huawei, Vivo, and Xiaomi Dominate the China’s Smartphone Market as Subsidies Drive Sales

Huawei claimed second place in China last year, while Xiaomi was closely behind.

Huawei Technologies took the gold in China’s smartphone market in January. Thanks to the government subsidy scheme given to people to buy electronic devices, based on the data reported by the industry consultancy Counterpoint Research.

Last year, Vivo secured the second place, while Xiaomi was closely behind. The top three manufacturers contributed around 54 percent of the almost 29 million smartphones sold in China last month.

The total sales in the market increased by 17 percent compared to the previous year, with devices like handsets priced between 2000 yuan and 5000 yuan (approximately US$275 to US$688) facing the highest growth.

The Chinese smartphone market went the extra mile due to the government scheme that began on January 20. China offered initiative schemes offering a 15 percent subsidy for buying smartphones, tablets, and smartwatches at prices under 6,000 yuan (US$818), aligning with the government’s expanded trade-in program for consumer goods, as announced by the National Development and Reform Commission and the Ministry of Finance.  

The subsidy is limited to 500 yuan for every purchase, while consumers can only receive the price reduction for one item per category.

The Ministry of Commerce stated that the subsidy program is available for both domestic and foreign companies openly and equitably.

During the first week of the subsidy program, smartphone sales from January 20 to January 26 rose from 65 percent yearly to over 9.5 million units, based on Counterpoint data.

The nationwide subsidy program has raised the occasion of the Chinese smartphone market and will bring an additional 2-3 percent growth in the first quarter.

The government scheme aims to stimulate domestic consumption in the sluggish economy since there is cutthroat competition from global and local brands within the world’s largest smartphone market.

With the growth of artificial intelligence (AI) technologies, every smartphone manufacturer is trying to stay ahead by upgrading their devices with innovative features that will increase the competition in the market.

This quarter will witness the release of many highly anticipated new models.

Huawei, which claimed second place in China last year, recently hinted at the launch of a new smartphone with a “new form factor” feature running in its Android-free mobile platform, HarmonyOS Next, scheduled for release in March.

According to news outlet China Star Market, citing anonymous sources, the device could be a new type of foldable smartphone.

Apple‘s latest iPhone 16 model falls outside the Chinese subsidy policy due to its premium position.

Apple products are for high-end people in the market. Its top iPhone models, like the iPhone 16 series released in September, are excluded from the government subsidy scheme as their prices do not fall under the 6,000-yuan threshold.

The prices for Apple iPhone 16 Pro and iPhone 16 Pro Max models start at 7,999 yuan and 9,999 yuan, respectively.

The basic iPhone 16 model with 128-gigabyte storage costs 5,999 yuan, making it eligible for the program. Some older models, like the iPhone 15 and iPhone 14, also qualify under the scheme since their prices start at 5,399 yuan and 4,699 yuan, respectively.

They have recently introduced their budget-friendly iPhone 16e, which costs 4,499 yuan.

Chinese e-commerce platforms offer extra discounts for the 128-gigabyte and 256-gigabyte versions of the iPhone 16e. It is priced between 4,499 yuan and 5,499 yuan, which makes both models eligible for government subsidies.

Counterpoint’s Lam remarked that Apple remains eligible for the scheme even though the brand caters to high-end consumers who are less sensitive about government subsidies.

He added that the subsidy will help increase the sale of Apple’s older iPhone models, whose prices are below 6000 yuan, as these compete with the high-end models from Chinese brands.

Lam claimed that the government subsidy scheme would have less impact on the sale of domestic smartphones since many shopping platforms offer plenty of discounts.