China's smartphone sales show market recovery in October

China's smartphone market is exhibiting signs of resurgence, with a robust average year-on-year growth of 11% in the opening four weeks of October, as revealed by Counterpoint Research's latest smartphone 360-week tracking report. Huawei emerged as the most successful brand, capturing a significant portion of the net increase share during the same period.

Huawei emerged as the frontrunner in October, driven by the strong sales of its Mate 60 series devices. China analyst Archie Zhang attributed this success to Huawei's effective launch marketing strategy and the positive media attention surrounding its "Made in China" chipsets. This favorable perception has fueled robust demand, with double-digit growth rates persisting. Additionally, a halo effect has spread to other Huawei models, boosting their performance as well.

Production issues have been a recurring theme this year, with both Huawei and Apple under pressure to deliver new devices. The latter has experienced some issues with certain color variants on the Pro Max, leading to longer wait times and higher prices on some e-commerce platforms. The success of Chinese phone makers could pose challenges for Apple, which has derived nearly 20% of its revenue from China in recent quarters.

The outlook for Chinese mobile phone manufacturers has transformed dramatically. After encountering hurdles, they are now experiencing a remarkable surge in demand. Huawei is grappling with the unexpectedly high demand for its phones, particularly its popular Mate 60 series.

Xiaomi, another prominent Chinese smartphone manufacturer, is also riding the wave of success. Since its launch in late October, the company's Mi 14 series has garnered over 1 million orders which significantly boosted Xiaomi's market value, propelling it up by approximately US$20 billion since its low point in June this year.

Huawei's inventory shortage is due to much higher-than-expected demand and pressure on its parts supply chain and EMS suppliers. "Huawei's ability to adapt to the new normal will be a major determinant not only of its own growth, but also of the broader market," said Ivan Lam, senior manufacturing analyst.