Rising Costs Impact Market Dynamics
During the first quarter of 2026, China’s smartphone market experienced a 1% decline in shipments compared to the previous year, reaching a total of 69.8 million units. Omdia’s latest research highlights that rising component costs, particularly memory, led vendors to increase prices, affecting market dynamics.
Huawei led the market by shipping 13.9 million units, capturing a 20% market share. Apple followed closely with 13.1 million units shipped, securing a 19% share. After its reintegration with realme, OPPO shipped 11 million units, making it one of the top three vendors.
Hayden Hou, Principal Analyst at Omdia, stated that “to balance volume, revenue, and profitability against rising memory prices, several major vendors, including Xiaomi, HONOR, OPPO, and vivo, raised retail prices on select models by 10–30% in the first quarter.” This strategy noticeably impacted consumer purchasing sentiment.
Vivo secured the fourth position with 10.5 million units shipped. Meanwhile, Xiaomi experienced a decline, shipping 8.7 million units compared to 13.3 million units during the same period last year. Huawei and Apple avoided broad price hikes, enabling them to gain more market share.
Lucas Zhong, Senior Analyst at Omdia, emphasised the potential for innovations in flagship and foldable devices to stabilise demand. He noted that enhancements in AI capabilities and peripheral specifications would be significant themes in product development this year.
The combined market share of the top six vendors, comprising Huawei, Apple, Xiaomi, OPPO, vivo, and HONOR, reached 94% in the first quarter of 2026. Despite these figures, Omdia forecasts a 10% contraction in the market by the end of the year due to ongoing memory cost pressures.
Advancements such as the LOFIC image sensor in Xiaomi’s 17 Ultra series, OPPO’s Find N6 near crease-free design, and HONOR’s Magic V6 lightweight design with a high-capacity battery showcase innovative strides in peripheral specifications. Meanwhile, AI agent capabilities are becoming a major focus for vendors at the software level.
Omdia emphasises that smartphones remain an ideal platform for AI agents. Vendors that can deliver distinct and practical AI experiences will enhance their brand perception and establish new strategic advantages in the competitive landscape.
As memory volatility and AI’s trajectory continue transforming the market, top vendors must remain vigilant. The ability to manage supply chains, research and development, operating systems, and services will be crucial for maintaining leadership in this dynamic environment.
Last updated: 14 April 2026, 1:34 pm
