The smartphone market in mainland China is a battleground, and the latest news is a stark reminder: sales are still down. According to Omdia's recent report, the market experienced a 3% year-on-year decline in the third quarter of 2025. But here's where it gets interesting: while the overall market shrank, the competition at the top intensified, with the leading brands fighting tooth and nail for every customer. Let's dive into who's winning and why, and what it all means for the future of smartphones.
Omdia's research reveals that vivo managed to snatch the top spot, shipping 11.8 million units and grabbing an 18% market share. That's a significant achievement in such a competitive landscape. Trailing closely behind was Huawei, with 10.5 million units shipped, representing a 16% share. Apple, riding the wave of its previous quarter's success, continued its strong performance, shipping 10.1 million iPhones. This propelled them two places up the rankings, securing a spot in the top three. Xiaomi wasn't far behind, shipping 10.0 million units and landing in fourth place, while OPPO rounded out the top five with 9.9 million units. The margins are incredibly tight, highlighting the intense rivalry among these giants.
This 3% decline indicates the market is still adjusting after earlier fluctuations, with vendors being extra careful about how many phones they ship and keep in stock before the big holiday shopping season kicks off.
According to Lucas Zhong, Analyst at Omdia, the market decline might not be as bad as it seems. "Although the market has contracted for two consecutive quarters, the narrowing decline indicates that the shipment fluctuations triggered by the government subsidy program at the beginning of the year are coming to an end, with the market gradually returning to normal," he explained. Essentially, the wild swings caused by temporary subsidies are fading, leading to a more stable, predictable market. He also notes, "A more cautious shipment pace has allowed vendors to maintain healthier inventory levels, paving the way for an active Q4 driven by flagship launches, the Double 11 shopping season, and a potential new round of subsidies." This suggests that companies are preparing for a strong finish to the year, fueled by new phone releases and promotional events. And this is the part most people miss... it's not just about the short-term gains.
Zhong also pointed out the longer-term strategic moves being made by vendors, particularly Huawei. "Since the launch of the Pura X earlier this year, Huawei has preinstalled HarmonyOS 5.0 across its major new models. While this transition poses short-term challenges in software optimization and user experience, consistent execution will likely strengthen Huawei’s ecosystem moat, particularly in an increasingly saturated market." Huawei is betting big on its own operating system, aiming to create a stronger, more independent ecosystem. This is a bold move, as it requires convincing users to embrace a new platform. But if successful, it could give Huawei a significant competitive advantage.
Another key trend observed in Q3 was the focus on improving entry-level and mid-range phones. As component prices rise, manufacturers are becoming more strategic with their upgrades. "Major vendors refreshed their entry-level and mid-range product lines in Q3. Amid rising component prices, these upgrades have become more targeted and pragmatic," Zhong added. "The HONOR X70, Redmi Note 15 Pro, vivo Y500, and OPPO A6 all share a common direction - equipped with large 7000mAh+ batteries and improved water, dust, and drop resistance. These enhancements not only leverage advances in battery technology but also directly address mass market consumers’ core concerns about durability and battery life." In other words, companies are focusing on what matters most to everyday users: long battery life and durability. This is a smart strategy to retain existing customers and attract new ones in a price-sensitive market.
Despite the recent downturn, Omdia remains cautiously optimistic about the future. Hayden Hou, Principal Analyst at Omdia, believes that "mainland China’s smartphone shipments will achieve modest growth in 2025, supported by ongoing subsidy programs." He also highlights the importance of innovation and differentiation. "Local vendors are pursuing differentiation through design, battery capacity, and camera performance, while expanding AI-driven features and use cases to enhance user experience. Chinese consumers remain among the most receptive globally to AI-capable smartphones. The innovation and technological progress seen in mainland China’s market will continue to serve as a valuable reference for domestic brands as they strengthen their product capabilities and AI competitiveness overseas." This suggests that the future of the Chinese smartphone market lies in embracing AI and offering unique features that appeal to local consumers.
But here's where it gets controversial... While Omdia forecasts growth, some analysts argue that the Chinese market is approaching saturation, making significant growth increasingly difficult. Could the reliance on government subsidies ultimately hinder long-term innovation and competitiveness?
Here’s a question for you: Do you think Chinese smartphone brands can maintain their growth trajectory by focusing on AI and localized features, or will they need to look beyond China for future expansion? Share your thoughts in the comments below! Let's discuss the future of the smartphone market in China. What are your predictions?
