The Chinese high-end smartphone market is undergoing a major transformation

Author | Huang Yu

Editor | Zhou Zhiyu

In 2024, the Chinese smartphone market is undergoing dramatic changes.

This year, Huawei smartphones have entered a major counteroffensive phase to reclaim the top position, with the entire product line returning to 5G and the global debut of mass-produced three-fold screen smartphones, making the already fierce smartphone war even more intense, especially in the high-end smartphone battlefield.

The endpoint of the smartphone race is "premiumization." In recent years, major smartphone manufacturers have been targeting the high-end market with full force. The launch of the "AI smartphone era" last year has provided some smartphone brands that have yet to establish a foothold in the high-end market with opportunities for a leapfrog advantage.

Huawei's return and the rise of more domestic high-end phones have broken Apple's long-standing dominance in the Chinese high-end smartphone market.

Of course, in addition to Apple, many domestic smartphone brands have also been impacted by Huawei.

Among the four major domestic smartphone brands—vivo, Xiaomi, Honor, and OPPO—Xiaomi was pushed out of the top five in domestic shipments last year, becoming part of the "Others" category, while Honor, seen as a "Huawei alternative," not only slipped from second to fourth but also recently experienced a major upheaval in its leadership, with CEO Zhao Ming stepping down.

In summary, as Huawei gradually regains market share, the landscape of the Chinese smartphone market has dramatically changed.

According to IDC data, thanks to the gradual release of pent-up replacement demand over the past few years, the total shipment volume of the Chinese smartphone market in 2024 is expected to be approximately 286 million units, a year-on-year increase of 5.6%, marking a rebound after two years of decline.

Among them, vivo maintains the top position in annual shipments with a market share of 17.2%. Although Huawei did not return to the top position in the domestic market in 2024, it ranks second with a market share of 16.6%, with a year-on-year shipment increase of over 50%, the largest growth among leading manufacturers.

Apple, Honor, and OPPO follow closely behind, ranking third, fourth, and fifth respectively, with less than a 1% difference in market share, highlighting the intense competition.

Additionally, according to data obtained by Wall Street Insights from IDC, in the Chinese high-end market above $600, Huawei has also regained more market share that was previously taken by Apple. Last year, Huawei's market share was 30.7% (up from 21.4% in 2023), while Apple's dropped to 51.1% (down from 61.8% in 2023).

Although Honor, vivo, and Xiaomi have all entered the top five in the high-end market, their current market shares are still only around 4%.

Counterpoint senior analyst Ivan Lam told Wall Street Insights that the Chinese market is becoming increasingly mature, and the trend toward premiumization is becoming more pronounced. Last year, international brands saw a decline in their share of the high-end market. Since the launch of the Huawei Mate 60 series, Huawei has made a strong return to the high-end market, with its market share continuing to rise. Other domestic brands are also making continuous efforts in the high-end sector, and although their shares in the above $600 segment are currently in single digits, most have achieved varying degrees of growth For a long time, the only domestic smartphone brand that could compete with Apple in the high-end smartphone market was Huawei. When it first entered the smartphone market, it took the high-end route and was also seen as a leader in China's advanced technology sector.

Before being sanctioned by the United States, Huawei's market share in the high-end smartphone market once surpassed that of Apple. According to IDC data, in the first half of 2020, Huawei held approximately 44.1% of the high-end smartphone market in China (priced above $600), while Apple had 44%, and Xiaomi ranked third with 4%.

During the two years of Huawei's subsequent silence, Apple dominated the high-end smartphone market in China. In recent years, as domestic smartphone brands continued to invest in high-end flagship models, their market share in the segment of smartphones priced above $600 in China began to gradually recover.

From the perspective of the overall high-end market share, although Xiaomi did not significantly distance itself from other domestic smartphone brands last year, it still maintained its third position in the fourth quarter when it launched its annual high-end flagship.

According to market research firm BCI data, based on the activation volume of new devices in November 2024, Apple, Huawei, and Xiaomi ranked in the top three in the high-end smartphone market priced above 4,000 yuan, with corresponding shares of 39%, 21.68%, and 16.69%. The top three brands together accounted for a total of 77.37% of the market share, while the fourth-ranked OPPO had a significant gap with a share of 6.13%.

Xiaomi's achievements in the high-end market last year were evident. The IDC report pointed out that Xiaomi continued to break through in the high-end market, achieving a near two-year high in market share for smartphones priced above $600 in the fourth quarter. Counterpoint also stated that Xiaomi made significant progress in high-end positioning in 2024.

Xiaomi President Lu Weibing recently revealed that in 2024, Xiaomi's global high-end smartphone sales had surpassed 10 million units, likely reaching around 12 million, a year-on-year increase of 43%.

In the context of overall shipment volumes being somewhat lackluster, high-end positioning is currently an important strategy for Xiaomi to seek breakthroughs.

The year Huawei began facing "neck-choking" restrictions, Xiaomi started its own journey into the high-end market. At that time, Lei Jun boldly declared at a Xiaomi press conference that he would attack the domestic high-end market and "take down Huawei"; two years ago, he officially proposed to "benchmark against Apple"; in 2023, Lei Jun also stated that pursuing high-end positioning is a matter of life and death for Xiaomi.

Wang Jiping, Vice President of IDC Global and China, told Wall Street Insights that two main factors will influence the competitive changes in the high-end smartphone market in 2024. On one hand, there is the technological aspect, as various manufacturers are beginning to layout AI smartphones and foldable phones in the market priced above $600, while also continuing to enhance camera functions.

The second aspect is brand value, as manufacturers are consolidating their existing customer base while also emphasizing the influx of customers from other brands, such as middle-class consumers, seniors, original point groups, and college students.

In seeking breakthroughs in the high-end market, foldable screens continued to be a focus for domestic smartphone brands last year, with Xiaomi even launching its first small foldable phone According to IDC data, in 2024, Huawei continues to maintain an advantage in the Chinese foldable smartphone market with nearly 50% market share; Honor ranks second with a share of 20.6%; vivo ranks third with a market share of 11.1%; Xiaomi occupies fourth place with a market share of 7.4%, relying on the success of its first vertical foldable product.

However, the foldable smartphone market has shown signs of slowing growth.

IDC pointed out that in the fourth quarter of last year, the shipment volume of foldable smartphones in China reached 2.5 million units, marking the first year-on-year decline of 9.6% after nine consecutive quarters of rapid growth. Although there have been continuous improvements in aspects such as thinness, battery life, imaging, and creases, inherent disadvantages such as price, quality, and internal space have made it difficult for foldable smartphones to achieve greater breakthroughs and attractiveness in usage scenarios and consumer demographics.

IDC believes that foldable smartphones are expected to enter a "small year" in 2025, with more manufacturers adopting a wait-and-see attitude and becoming more conservative.

Against the backdrop of smartphones facing bottlenecks in hardware and software innovation, AI is expected to drive a new wave of smartphone upgrades, with 2024 recognized as the "Year of AI Smartphones," and no manufacturer dares to miss out on this AI race.

In this arena, Samsung fired the first shot for AI smartphones, followed by Huawei, OPPO, Honor, vivo, and others, while Apple moved slowly, only releasing its plans for Apple Smart in June last year. It wasn't until December 12 that ChatGPT, an important "external aid" for Apple Smart, was officially integrated.

In the Chinese market, since ChatGPT has not been filed and launched, Apple urgently needs to find a suitable Chinese large model manufacturer for Apple Smart due to compliance requirements.

However, compared to traditional smartphones, AI smartphones have yet to make breakthrough innovations and are still far from becoming autonomous perception, autonomous decision-making execution, and possessing digital personality as AI Agents.

Therefore, the first batch of users using AI smartphones has not been truly convinced. Previously, a survey by SellCell showed that 73% of Apple Smart users and 87% of Samsung Smart users believe that AI adds almost no value to the smartphone experience.

Looking ahead to 2025, Ivan Lam pointed out that market trends will be similar to last year, with domestic brands continuing to increase their investment in the high-end market, and sales are expected to further rise. Especially in the $600 - $800 price range, domestic brands will consolidate their market share with more distinctive products that deeply align with Chinese consumers' usage habits in areas such as photography, AI technology, and user experience.

"In the high-end market above $800, domestic brands will also strive for more sales; of course, international brands may have more innovative enhancements this year to protect their market share, making competition in the high-end market even more intense."

Wang Jiping also stated that in 2025, under the dual stimulation of national subsidies and technologies such as AI and foldable screens, the $600 - $800 market will continue to expand, becoming a new focus of competition among manufacturers.

Starting from national subsidies for smartphones, the smartphone battle has already begun in 2025, but what will truly impact the market landscape and lead the smartphone industry into a new era is still AI smartphones Every new technological revolution brings about a new round of industry reshuffling. It is foreseeable that the competition in the smartphone battlefield in 2025 will be even more intense