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Huawei—not Xiaomi—is currently leading China’s smartphone market, and the market is shrinking rather than growing. In the latest available quarter, Q2 2026, mainland-China smartphone shipments fell year over year. Huawei gained share, Apple also performed strongly, and Xiaomi ranked fifth in both major market snapshots. The “Xiaomi and Huawei lead a growing market” framing describes parts of the earlier recovery, but not the market’s present direction.
The latest position: Huawei leads while total shipments fall
The most useful starting point is to separate vendor leadership from market growth. Huawei has regained the top position by smartphone shipments, but China’s overall market is contracting.
IDC’s preliminary Q2 2026 tracker estimated that mainland-China smartphone shipments fell 4.3% year over year to approximately 66 million units. Huawei held 22.6% share and grew shipments 19.4%, while Apple held 18.1% share and grew 24.4%. Xiaomi ranked fifth after a 21.7% shipment decline. Reuters also attributed part of the market weakness to higher memory and component costs, which encouraged manufacturers to raise prices.
Omdia’s Q2 estimate was directionally similar but not identical: shipments declined 2% to 66.1 million units, Huawei reached 23% share, and Xiaomi shipped 8.2 million phones for 12% share. These differences are normal for independent trackers. Their methodologies, vendor-group definitions and shipment estimates are not interchangeable.
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IDC’s Q2 2026 snapshot
| Vendor | Position or signal |
|---|---|
| Huawei | First; 22.6% share; shipments up 19.4% year over year |
| Apple | Second; 18.1% share; shipments up 24.4% |
| OPPO | Behind the two leaders |
| vivo | Behind the two leaders |
| Xiaomi | Fifth; shipments down 21.7% |
Source: IDC, with vendor-growth figures also reported by Reuters. Geography is mainland China and the figures concern shipments, not necessarily consumer sell-through.
Omdia’s figures provide additional context: Huawei had 23% share; OPPO, including OnePlus and realme, shipped 10.6 million units for 16%; vivo shipped 10.5 million for roughly 16%; and Xiaomi shipped 8.2 million for 12%. Apple was second, although the supplied Omdia summary does not provide its exact share. Do not combine these percentages with IDC’s table as though they came from one dataset.
Was China’s smartphone market ever growing?
Yes—but the timing matters. Counterpoint reported a recovery in late 2024, including year-over-year shipment growth in Q4, and described a period of consecutive quarterly growth extending into the earlier part of 2025. That historical improvement helps explain why older headlines presented Xiaomi and Huawei as beneficiaries of a growing market.
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Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstallIt does not describe Q2 2026. The latest quarter marked another decline, and the first half of 2026 remained weak. Omdia estimated that the full-year 2025 mainland-China market declined 1% to 282.3 million units, even as Huawei reclaimed first place with 46.8 million shipments and 17% share.
“The market is growing” can also mean different things:
- Shipments: phones supplied into the channel by vendors.
- Sell-through: phones actually purchased by consumers.
- Revenue: the value of phones sold, which can rise even when unit volume falls if prices increase.
- Premium growth: demand for expensive phones, which may remain healthier than the mass market.
- Subsidy-assisted demand: purchases influenced or accelerated by government support rather than entirely new underlying demand.
A market can therefore ship fewer phones while generating more revenue, or a vendor can gain share while its own shipments decline if competitors fall faster. The Q2 2026 headline is specifically about declining shipment volume.
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Why Huawei regained the lead
Huawei’s return is more than a single successful launch, but the shipment data alone cannot prove that one factor caused its growth. Its position reflects a combination of premium products, domestic brand strength, ecosystem differentiation, product timing and supply availability.
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Omdia identified product launches and relatively stable pricing as factors supporting Huawei’s Q2 performance. The domestic HarmonyOS ecosystem gives Huawei a point of differentiation for buyers who value integration with other Huawei devices and services. Brand loyalty, interest in domestically developed technology and national technology sentiment may also support demand, particularly after years of sanctions-related supply restrictions. Those considerations are context, not proof that political sentiment alone explains every purchase.
Huawei’s growth should not automatically be described as broad-based across every price tier. The available figures show strong overall shipments, but they do not establish that Huawei is dominating every low-cost, midrange and premium segment. Its comeback appears especially important in premium and selected midrange products, where brand, hardware features and ecosystem identity can carry more weight.
Nor does domestic leadership equal global leadership. Huawei’s international availability, software compatibility and access to services can differ substantially from the Chinese-market experience.
Why Xiaomi still matters—and why its China position is weaker
Xiaomi remains a major Chinese and global smartphone company. Its value proposition spans affordable Redmi models, mainstream Xiaomi phones and higher-end devices. It has historically benefited from aggressive pricing, frequent product refreshes, online distribution and strong specifications for the money.
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Those strengths remain commercially relevant, but they have not translated into current leadership in mainland China. IDC recorded a 21.7% year-over-year shipment decline for Xiaomi in Q2 2026, and Omdia placed it fifth with 8.2 million shipments and 12% share.
Xiaomi is being squeezed from several directions:
- Premium competition: Huawei and Apple are competing for buyers willing to spend more.
- Domestic Android competition: OPPO, vivo and Honor remain significant in midrange and value segments.
- Distribution: OPPO and vivo have strong offline retail reach, while Xiaomi has historically been associated more closely with online and direct channels.
- Costs: Higher memory and component costs can undermine value pricing or force price increases.
- Subsidy timing: Earlier subsidy-supported gains can create a difficult comparison when the purchase incentive changes or demand has already been pulled forward.
Counterpoint previously reported strong shipment growth for Xiaomi and Huawei during a subsidy-supported period, including 40% growth for Xiaomi and 18% for Huawei in the relevant comparison. That helps explain the earlier growth narrative, but a temporary lift in subsidized shipments is not the same as durable organic demand.
Xiaomi’s global position should be assessed separately from its China ranking. A company can remain globally important while losing domestic share, because country-level competition, retail structure, pricing and consumer preferences differ.
How China’s phone subsidy affects the numbers
China’s 2026 national consumer trade-in or “buy new” program covers phones, tablets, smartwatches, smart bands and smart glasses priced at no more than RMB 6,000. The national rule provides a subsidy of 15% of the purchase price, capped at RMB 500 per consumer for each eligible product category. See the government policy notice and the NDRC disclosure.
For example, 15% of a RMB 3,000 phone is RMB 450, while 15% of a RMB 5,000 phone is RMB 750—but the latter is limited to the RMB 500 cap. A phone priced above RMB 6,000 is outside the national price ceiling, even if a retailer offers another promotion.
The effect on market statistics is complicated. Subsidies can:
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- make an eligible phone more affordable;
- move a planned purchase into the current quarter;
- encourage an upgrade that might otherwise have been delayed;
- shift demand toward qualifying models below the price ceiling; and
- create unusually strong or weak year-over-year comparisons depending on when the program operated.
Actual availability can vary by locality, retailer participation, consumer eligibility, quota, reimbursement arrangements and implementation timing. A vendor’s subsidy-assisted shipment increase therefore should not be treated as proof that the market has structurally returned to growth.
Why smartphone shipments are falling
China is a mature and highly penetrated smartphone market. Many consumers already own capable devices, so replacement cycles can lengthen when the benefits of a new phone are incremental. Market saturation and consumer caution make it harder for vendors to expand unit volume.
Higher memory and other component costs add another constraint. If manufacturers pass those costs through, the effective price of a replacement rises. If they absorb them, margins suffer. Either outcome can reduce the incentive to replace a functioning phone or encourage consumers to wait for a promotion.
The comparison with subsidy-heavy periods is also important. A quarter that benefited from trade-in support can make the following period look particularly weak if purchases were brought forward. Product-launch timing matters as well: a vendor with a fresh flagship range may perform differently from one between major launches.
There is also a strategic trade-off. Vendors may prioritize revenue and margin, especially in premium devices, rather than chase every unit with deep discounts. That can produce a healthier business mix while still contributing to falling shipment totals.
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This is not a two-company race
Huawei and Xiaomi attract most of the attention, but the competitive field is broader.
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- Apple was second in IDC’s Q2 2026 snapshot, with 18.1% share and 24.4% year-over-year shipment growth. Its premium positioning and ecosystem appeal give it strength even in a contracting market, although its prices limit its reach in lower segments.
- OPPO remains important across mainstream and midrange phones and has substantial physical retail reach. Omdia’s group figure includes OnePlus and realme, so it should not be compared with a standalone-brand figure without checking the definition.
- vivo is another major domestic competitor with broad offline distribution and a wide Android portfolio. Its position can look different depending on whether the dataset measures a corporate group or an individual brand.
- Honor is an independent competitor, not part of Huawei for post-separation market analysis. Counterpoint notes that Honor separated from Huawei in Q4 2020; Huawei brand-family volumes exclude Honor from Q1 2021 onward.
Rankings also vary according to whether a research firm measures shipments, sell-in, sell-through, revenue, brands or corporate groups. “China’s market leader” should therefore always include a period, geography, metric and research provider.
What buyers should compare
For a buyer, shipment leadership is only one decision criterion.
- Huawei: Consider it if domestic ecosystem integration, premium hardware, Huawei services and same-brand trade-in support matter most. Verify China-market software and app compatibility, particularly if you depend on Google Mobile Services or overseas apps.
- Xiaomi: Consider it if value, Redmi’s price range, charging, gaming performance and broad model choice are priorities. Check whether the specific model qualifies for the subsidy and whether the China version meets your software needs.
- Apple: Consider it if a premium software ecosystem, long-term platform continuity and resale demand outweigh the higher upfront price.
- OPPO, vivo or Honor: Compare camera hardware, retail support, warranty access, battery performance and the exact model’s software policy rather than relying on corporate-level rankings.
Huawei’s official value-retention service advertises potential credit of at least 50% of original suggested retail price for specified devices and conditions. It is conditional trade-in credit, not a guaranteed cash resale value. Huawei’s 2026 repair promotion advertises selected motherboard repairs from RMB 399, subject to model, inspection and service restrictions. Details are available through the upgrade service and repair program.
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What happens next?
Several outcomes remain possible:
- Huawei could sustain its lead if product launches, supply and domestic ecosystem demand remain strong.
- Xiaomi could recover if it improves premium conversion in China or competes more effectively in subsidy-eligible price bands.
- Apple could continue benefiting if premium demand remains resilient despite weaker overall volume.
- OPPO, vivo and Honor could gain from their distribution and value coverage if consumers trade down.
- Subsidies could stabilize purchases without creating lasting market expansion if they mostly accelerate replacements.
- Unit volume could remain under pressure if component inflation, higher prices and longer ownership cycles persist.
These are scenarios, not forecasts. Q2 market figures may also be revised, and future rankings will depend on product timing, subsidy implementation and the methodology used by each tracker.
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