Top four findings of survey

1. Rising popularity of Chinese smartphone brands

We have conducted Handset market survey in 2017 and 2018 with 1056 and 1788 respondents respectively. Around 96% respondents in 2018 are located in mainland China, against 100% in 2017.

Figure 1: Which brand of smartphone do you use most frequently?



Source : Invbots.com

In 2018, Top 5 most frequently used handset brands in 2018 are Huawei (27.80% respondents chose), Xiaomi (23.25%), Apple (22.55%), OPPO (8.41%) and Vivo (7.83%). Huawei gained the top spot in 2018 as Apple popularity fell. Xiaomi, together with other Chinese smartphone brands, also gained market share.

Figure 2: Smartphone brand popularity comparison between 2017 and 2018



Source : Invbots.com

In tier 1 cities, Huawei, Xiaomi and Apple have the highest popularity, whereas in non-tier 1 cities, Huawei, OPPO and Vivo popularity have increased significantly and Apple popularity has declined significantly. However, Chinese brand popularity is much lower outside of China.

Figure 3: Smartphone brand popularity by cities

Huawei

Xiaomi

Apple

OPPO

Vivo

Chinese cities (1st tier)*

28%

24%

24%

9%

8%

Chinese cities (other tiers)

30%

21%

15%

12%

11%

Others (Hong Kong and foreign countries)

1%

3%

70%

0%

2%

*1st tier cities include Beijing, Shanghai, Shenzhen, Guangzhou, Chengdu, Hangzhou, Tianjin, Wuhan, Chongqing, Nanjing, Suzhou, Xi’an, Zhengzhou, Changsha, Shenyang, Qingdao, Ningbo, Dongguan, Wuxi.

2. Which brand to buy next? Xiaomi ahead of Apple

Regarding the question which brand to buy for new handsets, Huawei, Xiaomi, Apple, OPPO, Vivo are the top 5 brands. In this question, Xiaomi is ahead of Apple as the No. 2 brand.

Figure 4: Brand of New smartphone (bar charts: top 5 brand to buy vs. top 5 existing brands)



Source: Invbots.com

In this multiple-choice question, we have assumed that the respondents would have the same probability to buy the brands chosen. After calculating the probability of each respondent buying each brand, we take average of the 1788 respondents and get the following probability.

3. Apple and Xiaomi users have high loyalty

We have selected those respondents who have selected only one brand name for the current phone to study the loyalty. For each respondent, we have calculated their probability of buying each brand for the new phone and take average to get the probability of buying their current brand again.

Apple users are the most loyal to their smartphone brand as 71% of existing Apple users are willing to buy iPhone again. Among Chinese vendors, 64% of Xiaomi users will buy same brand for replacement, whereas Huawei user loyalty is 61%.

Excluding existing users choosing same brand for replacement, Huawei has the highest popular vote, 83%, received from other phone brands, significantly higher than Apple and Xiaomi at 39%.

Figure 5 : Popularity of new smartphone brand, based on existing smartphone brand*

Existing phone brand

New phone

Apple

Xiaomi

Huawei

OPPO

Vivo

Apple

71%

8%

12%

12%

7%

Xiaomi

5%

64%

14%

10%

10%

Huawei

14%

15%

61%

26%

28%

OPPO

3%

3%

4%

35%

13%

Vivo

2%

3%

4%

10%

34%

Source: Invbots.com

* Users can choose multiple choices

4. Xiaomi IoT devices with high penetration

More than 92% of respondents are using at least one Xiaomi IoT devices.

98% Xiaomi users are using Xiaomi IoT devices, followed by 96% for Huawei users, 92% for OPPO, 91% for Vivo and 88% for Apple.

Xiaomi users have an average 2.55 different types of Xiaomi IoT devices, while Non-Xiaomi users have an average 1.56. It shows that Xiaomi users have high brand loyalty and brand affiliation with Xiaomi brand. Probability of Xiaomi users using Xiaomi IoT device is higher than non-Xiaomi users among all devices, except Mi TV, likely because price level of Mi TV is higher than others.

Figure 6: Proportion of Xiaomi users and Non-Xiaomi users using the following devices)

Xiaomi users

Non-Xiaomi users

Mi TV

10%

29%

Mi Box

33%

16%

Notebooks & related accessories

39%

21%

Electrical appliances

15%

10%

Household items

18%

11%

Travel gadgets for children

37%

19%

Routers & smartphone accessories

4%

4%

Power banks & charger accessories

27%

14%

Audio

40%

19%

Lifestyle products

27%

10%

Other

6%

3%

Source: Invbots.com

Figure 7: Number of IoT devices by brand

Huawei

Xiaomi

Apple

OPPO

Vivo

Number of types of Xiaomi IoT devises

1.93

2.55

1.87

1.6

1.64

Source: Invbots.com

Other interesting findings from the survey

Xiaomi – male users dominate, higher average user age

Female represented higher proportion of smartphone users of Apple, OPPO and Vivo, whereas Male users are dominant in Xiaomi.

Figure 8: Smartphone brand popularity by gender



Source: Invbots.com

Average age of OPPO and Vivo users were younger than overall user base. Xiaomi and Huawei users age are the highest.

Figure 9 : Smartphone brand popularity by gender



Source: Invbots.com

The average life of 2018 survey respondents’ smartphones is 1.87, 51% higher than that in 2017. Thus, many users have lengthened the product replacement cycle.

Figure 10: Smartphone age breakdown



Source: Invbots.com

Average age of Apple handset at 2.28 is the highest in 2018, and has substantially increased from 1.25 in 2017. It would imply many users have not upgraded their phone during 2017 product cycle. Average age of Xiaomi smartphone was 1.72, up 31% YoY, and Huawei average age was 1.64, up 41 % YoY.

Figure 11: Smartphone age by brand



Source: Invbots.com

Smartphone ownership increases in 2018

In 2018 survey, 58% of respondents responded using 1 smartphone, whereas 34% using 2 phones and the rest using 3 phones or above. On average, each respondent use on average 1.54 smartphones, more than that of respondents in 2017 (1.38), increase by 11.59%.

Figure 12: Number of smartphones in use



Source: Invbots.com

For those respondents saying using 2 handsets, 56% are using both android phones.

Smartphone costs fall by 17% in 2018: Xiaomi – among the lowest cost

Figure 13: What is the cost of your smartphone?



Source: Invbots.com

Regarding the cost of existing smartphones, Apple handset users pay the highest among all. The average cost of Apple smartphones was RMB5,745, with a 7% YoY growth, while industry average cost has declined. Vivo and Xiaomi handset average cost are lower than RMB 2,000.

Figure 14: Smartphone cost by budget (High budget, Middle budget, Low budget)

* High budget: above RMB 6,000; Middle budget: RMB 3,000 – 6,000; Low budget: below RMB3,000



Source: Invbots.com

Budget for New smartphones declined: Xiaomi among the lowest budget

Regarding budget to buy new smartphones, the average smartphone budget in 2018 is RMB3,042, with a 22% decrease.

Figure 15: Budget for new smartphones



Source: Invbots.com

Comparing answers from the two questions: “cost of existing phone” and “new phone budget”, smartphone user budget hasincreased 10% from the average cost. Budget to buy Chinese smartphone has increased 19% to 24%, from the cost whereas Apple phone budget is 11% lower than existing cost.

Figure 16: Smartphone cost and budget comparison



Speed, memory and camera are top 3 reasons to buy a new phone

Figure 17:Reasons to use preferred smartphone brand



Source: Invbots.com

Figure 18: Reasons to use preferred smartphone brand (by brand)



Source: Invbots.com

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.





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