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Business trends

China's smartphone shipment dips below 100m in Q1

Big brands crush smaller rivals as market shrinks

A Xiaomi shop in Liaoning Province. The company was the only major vendor with strong growth thanks to a new in-store sales approach.   © Reuters

SHENZHEN -- Chinese smartphone shipments have declined year-on-year for four straight quarters, killing off some smaller competitors to the benefit of established producers.

Shipments for the January-March quarter fell 16% on the year to 87.5 million units, reports U.S. market researcher IDC. This is the first time quarterly shipments fell below the 100 million mark since the third quarter of 2013.

Smartphone shipments in 2017 retreated 4.9% for the first full-year drop ever, now that most Chinese who can afford a smartphone already own one. The slowdown is likely to affect parts and materials suppliers worldwide.

The top five vendors comprised 86% of that total compared to just 70% in the same period last year.

Top player Huawei Technologies edged up 1.9% to 21.2 million units. The company increased its market share 4.2 percentage points on the year to 24.2%.

Relative newcomer Oppo was ranked second even as it dropped 12.6% to 16.5 million units, losing its previous momentum.

Vivo, another upstart, came in third after sinking 4% to 14.2 million units. Vivo was unable to put the brakes on declining sales as it faces similar struggles to rival Oppo's.

Although Xiaomi placed fourth, it was the only major vendor to post significant growth with a 41.8% jump to 13.2 million units thanks to a successful shift in focus from online to in-store sales. Xiaomi decided to go public in Hong Kong last week. 

The release of Apple's new iPhone last fall did little to spur growth as the company came in fifth with only 2.5% growth to 9.8 million units.

ZTE, which was forced to almost suspend sales in China by Tuesday, was not included in IDC's top rankings. The current quarter will be a battle among Chinese rivals to absorb ZTE's share.

China had hundreds of smartphone makers up until about five years ago. But a market slowdown has forced may midsize companies and weaker startups to close. The market will probably continue toward consolidation should sales remain in a slump.

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