The Numbers

The latest data from IDC unravels some interesting facts. The report says that there were 334.9 million smartphone shipments in the first quarter of 2016 as opposed to 334.3 million last year. The overall year-over-year growth is the smallest growth ever recorded. The top rungs are still maintained by Samsung at the first place followed by Apple (despite the fall in shipments) but the things get interesting as we move down the ranks. Huawei stands at third with a year-over-year growth of 58.4%. Along with Xiaomi, Lenovo too has slipped two places, thanks to Oppo and Vivo.

Oppo and Vivo have surprised us by being ranked at fourth and fifth when it comes to total shipments in Q1 2016. Oppo has been betting big on the offline channels ever since it was launched and this strategy seems to have finally paid off well. Oppo has been selling steadily in Asia, Middle East and Africa and of course in China, a major chunk of the growth achieved by Oppo has been through the offline retail channels. Moreover, the 153.25% year-on-year growth is the highest amongst all. Vivo on the other hand has been micro managing their area of focus, it is one of the few companies that is not expanding to new markets until and unless it has established a strong foothold in the current market. Unlike Xiaomi, Vivo does have in place a strong offline retail presence, especially in the lower tier market. Another interesting fact is that both Oppo and Vivo have higher average cost of phone as opposed to Xiaomi.

The Xiaomi Story

Xiaomi’s dip in numbers can be attributed to the fact that the company did stagnate during the last leg of 2015 and the beginning of this year. Xiaomi tried hard to play the numbers game, they in fact also setup a milestone of 100-Million shipments for 2015 but were unable to achieve the same. It is but quite possible that the level of indigenity Xiaomi offered in MIUI is no more unique to the company and this is yet another reason why Xiaomi should be at their A-Game mode when it comes to MIUI 8. I personally felt that Xiaomi kind of rested on their laurels and stopped including new features like Fingerprint sensors and metal build while most of the competition already had them. It was during the ongoing dormant period of Xiaomi that LeEco and Honor fortified their position in the market. As we said earlier the absence of offline retail channels, something that Xiaomi was proud of initially might have weighed them down heavily. On the contrary, it would still be possible to see if Xiaomi can regain the lost spot in the next quarter as they do have a new impressive line-up at place and MIUI 8 is just around the corner. The fact that Xiaomi depends on other ODMs for their hardware needs might have potentially choked up the free flow of the inventory, other manufacturers have their own manufacturing units thus avoiding supply issues. This might also be the very reason that LeEco has bought controlling stakes in Coolpad, a company known for manufacturing smartphones comissioned by other brands.