:Huawei tops China smartphone market as costs rise

• China’s smartphone market declined 1% in 2025 to 282.3 million units, with Huawei returning to first place after five years with 17% market share
• Rising memory costs and subsidy policy adjustments create a challenging landscape for vendors and enterprise buyers in 2026

The Chinese smartphone market declined 1% year-over-year in 2025, reaching a total of 282.3 million units in shipments, as Huawei reclaimed the top position after a five-year absence, according to Omdia’s latest research.

Huawei shipped 46.8 million units for a 17% market share, narrowly edging out vivo’s 46.0 million units (16%) and Apple’s 45.9 million units (16%). Xiaomi and OPPO rounded out the top five with 43.7 million and 42.8 million units, respectively.

The marginal decline masks significant underlying dynamics that matter for enterprise procurement teams. Fourth-quarter results showed the China smartphone market posting only a 1% year-on-year decrease to 76.4 million units, driven by year-end promotions and national subsidy policies—although these subsidies primarily pulled demand forward rather than generating organic growth, according to Omdia.

“Due to inconsistencies in national subsidies in the second and third quarters, the market experienced an adjustment period,” said Lucas Zhong, Analyst at Omdia. “However, based on the practices implemented in 2025, all brands, including Apple, have completed their deployments by restructuring product portfolios and adjusting pricing strategies.”

Apple dominated Q4 with 16.5 million units (22% share), benefiting from what Hayden Hou, Principal Analyst at Omdia, described as “a product differentiation and upgrade strategy.” The iPhone 17 maintained entry-level pricing while upgrading storage and display specifications, increasing its contribution within the product mix compared to previous base models.

But rising costs present challenges ahead. “In 2026, rising costs will become a major challenge for smartphone vendors in both mainland China and global markets,” Hou said. “Rising memory costs are creating a highly dynamic environment for component supply, product strategy, and pricing strategy.”

For enterprises managing device procurement, this translates to potential pressure on the total cost of ownership. Vendors are attempting to balance cost allocation against price competitiveness while maintaining hardware upgrade paths—a tension that could affect corporate purchasing power.

Local brands are advancing premiumization strategies that may reshape enterprise options. Huawei committed RMB 1 billion to support innovation in the HarmonyOS and AI ecosystem, launching HarmonyOS 6 in October. Xiaomi brought forward its flagship Xiaomi 17 Ultra launch to December, ahead of competitors.

Despite short-term cost pressures, vendors are sustaining investments in channel enhancements, AI development, and cross-device ecosystems. “We expect 2026 to remain a year of value growth and product innovation in Mainland China’s smartphone market,” Hou said.

For corporate buyers, the stabilising subsidy framework and maturing channel partner processes provide a more predictable purchasing environment, even as component cost pressures loom.

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