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Smartphone market will grow 5 percent shipments in 2016

In China, Xiaomi and Apple have faced steep competition, with Huawei, Oppo and Vivo now the largest brands.
While Apple is expected to see its first annual decline in iPhone shipments this year, the smartphone market in general is still growing. Canalys projects that the smartphone market will grow 5 percent in 2016. Growth has been slowing for a while now, so it is no surprise that this rate is almost half of what it was in 2015. Still, the market is expanding much faster in certain markets. In the Asia Pacific region, excluding Greater China, smartphone shipments are expected to jump 13 percent. The exclusion of China is important since it is one of the more saturated markets in Asia.
China's own smartphone space has been undergoing some significant shifts. Numbers from IDC show Apple has fallen to fifth place in the country, with the top four consisting of all local brands. Xiaomi, which once dominated the market, is now in fourth place after seeing shipments crash more than 38 percent in the second quarter to 10.5 million units. Huawei is back at the top, shipping 19.1 million units. Oppo and Vivo, both subsidiaries of BBK Electronics, secured second and third spots, respectively.
Oppo and Vivo are not just doing well in China. They are now two of the best-selling smartphone brands in the world, thanks to selling low-cost hardware in developing markets that are still seeing high levels of mobile phone growth. The companies might not have been able to build up their brands, however, if not for their aggressive retail strategy in China. Rather than copying Xiaomi's technique of direct-to-consumer sales online, Oppo and Vivo started setting up shops all over China, seemingly on every street corner in large cities. This strategy, detailed by the Wall Street Journal, shows how local companies are using China's economic clout to grow into international brands.
These groups are not just producing inexpensive products, either. They are offering more high-end phones such as the Oppo R9 to compete with other flagship handsets. This dual strategy is what has helped Samsung stay relevant in a turbulent market as Apple's dedication to the premium side might finally start having a negative impact this year.
Although Samsung has seen considerable success with its latest Galaxy S7 and S7 Edge, other premium smartphones are not doing as well these days. This is primarily because China handsets costing about half as much work almost just as well. The Oppo R9 costs 2,500 yuan, or about $377. This is roughly equivalent to the OnePlus 3 and ZTE Axon 7, which both sell for $400 in the US. Oppo and Vivo are proving that there is plenty of room for other companies in the smartphone market, but future players are probably going to be from China.