This article originally appeared on ABACUS Huawei smartphones were a big winner in China last year, with shipments growing 35.5% year-over-year at Apple’s expense. But analysts warn that the Wuhan coronavirus outbreak gripping the country will have an impact in the year ahead. Numbers from a new report from market research firm Canalys show Huawei shipped 142 million units in China in 2019 while iPhone shipments fell 21% to 27.5 million units, just 7.5% of the market, putting Apple’s market share in fifth place in the country. Apple had 9% in 2018 . Sales picked up for Apple at the end of the year thanks to the lower-priced iPhone 11, allowing the company to beat out Xiaomi for the fourth quarter. But for the year as a whole, Chinese firms took up the top four spots, with Oppo, Vivo and Xiaomi all having double-digit market share even while suffering declining growth. The outbreak of the deadly coronavirus in Wuhan is also bad news for smartphone makers this year, according to the report. The smartphone market has already been seeing declining shipments, which was expected to slow in 2020 thanks to the deployment of 5G networks, according to Canalys vice president of mobility Nicole Peng. Shipments in the fourth quarter were already the lowest since the first quarter of 2013, and now the coronavirus outbreak in the country could further impact the market. Why 5G isn't just faster video streaming on your smartphone “Vendors need to take this outbreak much more seriously and start to think about how to react in multiple scenarios,” Peng said. Since the start of the outbreak in Wuhan in December, the government’s strict measures have resulted in factory workers staying at home, which could affect manufacturing. Retail will also be affected as more people stay home, Peng pointed out. One reason for the slump in smartphone sales last quarter is that consumers are waiting for more affordable 5G phones . Brands are racing to adopt the new high-speed network standard. Shipments of 5G smartphones are expected to exceed 150 million units in China this year. As a result, competition among the top five vendors will be cutthroat, Peng said. Last year, 8.9 million 5G smartphones were shipped in China, with Huawei making up 78% of the market. The smartphone maker had a few advantages at home, including a trade war that won the brand popular support in China even as it hurt the company’s smartphone operations overseas. Huawei also produces its own 5G chipsets. Vivo is the second-largest seller of 5G phones in the country, shipping 1.2 million units in 2019. Vivo and Xiaomi were the only brands competing in the mid-range 5G smartphone category in China last year since Oppo reserved its 5G phone for Europe . As sales struggled in China, Xiaomi announced ten 5G phones in 2020. As for international brands, Apple has yet to release a 5G phone. When it does, the upgrade rate could be better than expected, according to Peng. The iPhone 11 turned out to be the best-selling 4G device in China, showing the country’s consumers still have a strong appetite for the brand. Purchase the China AI Report 2020 brought to you by SCMP Research and enjoy a 20% discount (original price US$400). This 60-page all new intelligence report gives you first-hand insights and analysis into the latest industry developments and intelligence about China AI. Get exclusive access to our webinars for continuous learning, and interact with China AI executives in live Q&A. Offer valid until 31 March 2020.
