China's mobile market is by a comfortable margin the largest in the world, with over 1.3 billion monthly mobile subscribers across the three carriers. It is understandable then that short term trends and fashions can have a huge effect on the incomes of OEMs and the market as a whole.
% Smartphone Shipments By OEMs in Q3 2016
If are unfamiliar with the Oppo R9, the 5.5″ device was launched back in March and ships with a Mediatek Helio P10, Android 5.1, 64GB of internal storage and 4GB of RAM for around $425. The phone rapidly became popular and by mid-June had sold over 7 million units, an equivalent of one every 1.1 seconds.
Huawei, Xiaomi and Apple were pushed down to third, fourth, and fifth place respectively, the latter two taking a heavy hit and being knocked down an alarming 4% annually. Huawei is likely to bounce back as the OEM will undoubtedly be launching devices early into the year which will help bolster their lineup and see them return to the top spot over the course of the first half of 2017. A similar increase in shipments was seen this year and unless Oppo can replicate the success of the R9 again they could be knocked in the rankings once again.
China's mobile industry is not just limited to handsets of course. While smartphone shipments in China still account for a third of global shipments, the stabilizing of the Chinese economy during Q2 led to increased growth across the industry including carriers. The country has just three carriers, China Mobile, Unicom and Telecom which as mentioned above service over 1.3 billion subscribers.
| Name (English) | Name (Chinese) | Mobile Subscribers |
|---|---|---|
| China Mobile | 中国联通 | 845,824,000 |
| China Unicom | 中国移动 | 262,990,000 |
| China Telecom | 中国电信 | 213,910,000 |
All three carriers have seen healthy growth over the course of the year, with China Mobile seeing an incredible increase of just under 19 million mobile subscribers, which for a point of reference is close to the total population of Romania. At the end of 2013, prepaid SIMs accounted for 85% of connections in China… however, two years later this figure had dropped to just 78% as more users began opting for monthly subscriptions. If this trend is shown to have continued when the 2016 Q4 figures are released we could be seeing the beginning of a shift to a more evenly split market such as the UK's which has an almost 50/50 split between prepaid and postpaid SIMs.
(In thousands)
Despite this piracy problem China's app market is still seeing considerable growth and in 2020 is estimated to generate $31 billion in revenue, $21 billion of this is predicted to be from third party app stores. Likewise, app downloads are set to increase from 49 billion this year to over 90 billion in 2020, of which only 10 billion of these will be from Google Play. That being said if you are an app developer who only publishes their work to the Play Store you could be missing out on some serious traffic. If your app is popular then it may well be available in numerous pirate friendly stores already.
The Chinese market is changing rapidly, new marketing strategies and fierce competition continue to ensure that the top OEMs do not become stagnant. Growth across all three carriers has greatly aided growth in app downloads and revenue and if the forecasts prove to be accurate, then developers could see dramatic increase in profitability if opportunities are taken advantage of the right way.
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