SINGAPORE (Feb 6): In 2016, Apple Inc saw a y-o-y decline in the Chinese market for the first time ever – even as the smartphone market in China saw both y-o-y and q-o-q growth over the past year, according to a recent report by International Data Corporation (IDC).

Data from the latest IDC Quarterly Mobile Phone Tracker suggests that top Chinese smartphone vendors have been capturing a larger slice of the China market pie instead, with Oppo, Huawei and Vivo capturing 16.8%, 16.4% and 14.8% of market share respectively in 2016 alone, as compared to Apple’s 9.6%.

Tay Xiaohan, a senior market analyst with IDC Asia/Pacific's client devices team, believes this could be due to an increasing dependence on mobile apps which has led consumers to seek phone upgrades, thus helping to drive growth over the last quarter. He also notes how Oppo and vivo have been “aggressively” pushing mid-range smartphones to lower-tiered cities, where there was a similar demand.

“Despite the decline [in Apple’s share of the PRC smartphone market], IDC does not believe Chinese vendors have actually eaten away Apple's market share,” adds Tay.  

“Most Apple users are expected to be holding out for the new iPhone that will be launched this year, and that will help the brand to see a growth in 2017. Apple's 10-year anniversary iPhone will also likely attract some of the high-end Android users in China to convert to an iPhone.”

Other observations made by IDC include the slowdown of growth of the online channel in China, as smartphone brands have begun to use a combination of channels to increase their shipments instead of focusing solely on online retail.

Xiaomi, for example, has opened more brick-and-motar stores (Mi Home) to drive offline growth – as did Gionee, which is outside the top five vendor list in tiered cities but targets professionals and executives to stand out against Oppo and Vivo, who predominantly target a younger audience.  

Additionally, IDC believes Chinese smartphone vendors will continue to focus on their international expansion plans, with Huawei as the most successful vendor by far in this aspect as half of its shipments for 4Q last year came from outside China.  

The American market research, analysis and advisory firm reckons that “bold experimentation” with new smartphone technologies such as flexible screens and augmented reality is likely, even if they might not immediately lead to higher shipments.

“In the past year, vendors such as Huawei, Xiaomi, and LeEco developed phones with dual cameras, thin bezels, and digital headphone connectors well before many overseas vendors did,” recalls IDC.

According to the latest edition of Brand Finance’s Global 500 report, Apple has also declined in value by 27% over the past year to be overtaken by Google at the No.1 spot as the most valuable brand in the world.

(See also: Google steals Apple’s No. 1 spot as world’s most valuable brand)