Report: Chinese OEMs are Expecting Lower Sales in Q1 2017
Over the last few years, Chinese smartphone manufacturers have experienced an explosive amount of overall growth.
Companies like Huawei, LeEco, and Xiaomi have become household names in the Android enthusiast community, and for good reason. We’re seeing an expansion coming from these companies that can only be compared to the likes of Samsung in certain cases.
These OEMs have experienced rapid growth thanks in large part to capturing the enormous Chinese market. However, this type of growth is difficult to maintain because of the saturation of the Chinese smartphone market. Xiaomi broke company sales records in 2014, and was originally projected to hit 100 million shipments in 2015 before they were forced to lower those estimates. We’ve talked about LeEco’s financial issues over the last couple of months now, and while Huawei is comparatively booming, they too cannot expect to continue growing indefinitely.
Thus we’re now seeing a report that Chinese OEMs like Huawei, Xiaomi, and LeEco are reducing the number of component orders for the first quarter of next year. The report states Xiaomi wasn’t able to perform as well as the company had hoped during the third and fourth quarter of this fiscal year, so they’re expecting this trend to continue into the first quarter of 2017 and have adjusted their business dealings appropriately.
With LeEco toning down their aggressive marketing approach, they too seem to be more conservative with their component orders. This downsizing of component orders does not indicate any loss of profitability for these three companies, but instead demonstrates that the smartphone market does not present a source of rapid growth anymore – at least until a new market such as Africa opens up to these OEMs. What will be interesting to see is if these companies can retain their current customers and sales numbers rather than losing to other competitors in their region.