Canalys: China's smartphone market grew by 5% year-on-year in the first quarter, with Xiaomi (01810) returning to the top spot.

Canalys data shows that in the first quarter of 2025, the shipment volume of the Chinese smartphone market reached 70.9 million units, with a moderate year-on-year growth of 5%, driven by national subsidy policies and consumer recovery, continuing the recovery trend that began in 2024. Among them, Xiaomi (01810) shipped 13.3 million units, a 40% year-on-year growth, returning to the top spot after ten years with a market share of 19% under the stimulus of national subsidies and its strategy of integration of people, cars, and homes. Huawei followed closely behind, still maintaining double-digit growth, shipping 13 million units to rank second. OPPO and vivo ranked third and fourth with shipment volumes of 10.6 million and 10.4 million units respectively. Apple Inc.(AAPL.US) experienced a decline after its traditional peak season, with shipments of 9.2 million units, an 8% year-on-year decrease, ranking fifth. Canalys research manager Amber Liu stated: "The nationwide handset subsidy policy implemented in January has somewhat boosted market performance and overall has been relatively moderate. This policy to some extent prompted some consumers to upgrade early, but it mainly shifted the timing of demand forward rather than bringing new organic growth. From the perspective of manufacturers, overall stocking strategies remain rational and market inventory levels are maintained within a relatively healthy range. In addition to short-term demand boost, the far-reaching impact of the national subsidy policy is more likely to be reflected in channel structure adjustments. To consolidate market position and promote high-endisation, manufacturers' channel investments are focused on expanding brand store coverage, improving offline shopping experiences, and deepening channel partnerships, while the national subsidy policy further consolidates the advantages of large retail channels and mainstream e-commerce platforms like Tmall and JD.com, Inc. Sponsored ADR Class A." Canalys chief analyst Toby Zhu pointed out: "Xiaomi's significant growth momentum comes from the synergy of products and channels, allowing it to return to the top spot in the Chinese market after ten years. Xiaomi's unified pricing strategy at Wuxi Online Offline Communication Information Technology Co., Ltd. effectively reduces consumer decision costs under the national subsidy policy, and its coverage of all product categories from wearable devices, PCs, smart homes to cars maximizes the applicability of national subsidies, driving bundled consumption in multiple scenarios. Huawei has maintained active and effective channel management, continuing to achieve steady double-digit growth in the first quarter. After Mate XT, Pura X further expands the form boundaries of foldable screen products. More strategically, Huawei is accelerating the development of the HarmonyOS Next ecosystem, including updating it to the Nova12/13 series models, a move that will continue to reshape the current domestic operating system landscape and build competitive barriers for Huawei's ecosystem. HarmonyOS NEXT is expected to occupy 3% of the total installed base of the Chinese smartphone market in 2025 and achieve rapid growth." Canalys analyst Lucas Zhong said: "The rapid rise of DeepSeek has once again sparked consumer and industry attention to AI capabilities, proving that under the current technological landscape, manufacturers need to establish open and compatible ecosystem layouts and efficient response mechanisms to maintain a leading position in the AI era. In 2024, the penetration rate of AI smartphones in the Chinese market has reached 22%, and it is expected to exceed 40% in 2025. Continued innovation in foldable screens, AI smartphones, and operating systems is key for manufacturers to reshape the market landscape and overcome long-term market capacity bottlenecks. 2025 will be a year of market surges and waves. Despite the uncertainties in the external trade environment causing friction in macroeconomic stability and consumer confidence, with continuous macro-control and consumption policies, China's macro economy will maintain resilience in 2025. In the rapidly changing competitive landscape, the key to manufacturers' competitiveness lies in product differentiation, unified and flexible pricing strategies, and deep collaboration with channel partners."