Anxiety Over Declining Sales and the Drive for Premiumization

It's no secret that domestic mobile phone brands are striving to emulate Apple. OPPO claims its mission is to 'offer Apple users another viable choice,' vivo pledges to 'win over Apple's first-generation users,' and Honor declares its ambition to 'end Apple's dominance in the premium market.'

However, Xiaomi's recent decision to name its phones after the iPhone sparked a social media uproar. Despite Lei Jun's subsequent explanation for renaming the Xiaomi 17, the overly rigid benchmarking approach has done little to alter the widespread stereotype about Xiaomi.

Behind these actions lies a sense of anxiety over declining smartphone sales and the struggle to make a mark in the premium market. While criticism of imitation and copying is rampant, learning from and benchmarking against the iPhone has directly benefited domestic mobile phone brands. Yet, doubts persist about whether benchmarking and imitation can truly achieve the goal of premiumization.

01 Appearance vs. Substance: The Dilemma

While the iPhone faces constant criticism for its lack of innovation, domestic mobile phone brands are actively learning from Apple's product strategies.

In previous years, OPPO made numerous product strategy shifts in an attempt to break into the premium market. It once tried to emulate Huawei's premium business route by hiring Jiang Wen as a spokesperson and using a vegan leather finish. However, after realizing that these efforts did not resonate with consumers, OPPO ultimately refocused on the youth market, with its latest spokesperson being Sun Yingsha.

Behind this strategic shift, OPPO has consciously started learning from the iPhone in recent years, earning it the nickname 'Ophone' among the public. Not only does it actively ensure software ecosystem compatibility with Apple, but its product design also leans towards the iPhone. As one of the top three domestic mobile phone manufacturers, OPPO has faced internal opposition to this approach, with concerns that aligning too closely with the iPhone could damage its brand image.

However, the reality is that the product most resembling the iPhone has sold the best. The OPPO Find X8 standard edition, known as the 'Ophone,' accounted for more than half of the sales across the entire product line.

A similar situation has arisen with vivo. In recent years, vivo has adopted the slogan 'Apple alternative,' with product designs and hand feel resembling the iPhone. The most typical example is the small straight-screen vivo X200S, which features a similar size and right-angled edge design to the iPhone, looking very much like an iPhone from the front and side. This phone has also become the best-selling model in the vivo X200 series.

Xiaomi is the most experienced and has reaped the most benefits among these manufacturers. According to its latest disclosed data, the latest Xiaomi 17 series sold 1 million units in just three days. In fact, the last time Xiaomi's digital series skipped a number was in 2018 when it skipped the Xiaomi 7 and directly released the Xiaomi 8, which for the first time imitated the notch screen design introduced by the iPhone X. The Xiaomi 8 sold over 6 million units in six months, becoming one of the best-selling models in the Xiaomi digital series.

Faced with concrete sales data, the story of the mobile phone industry over the past decade seems to repeatedly validate one point: rather than feeling their way across the river, it's better to ride the iPhone across. Between appearance and substance, the pressure of performance and market ranking always forces manufacturers to choose the latter.

In fact, in the eyes of many, domestic manufacturers benchmarking against the iPhone is not simply a matter of imitation and copying. Unlike the direct copying of the iPhone by a host of counterfeit mobile phone manufacturers like NiCai in the past, current mobile phone manufacturers have sufficient strength, with significant progress in both technology and product experience.

Duan Yongping once expressed a viewpoint on a TV program years ago: most consumers do not truly value whether a product is original or has core technology. Originality is often overhyped, as 'no successful innovation starts without imitation.'

As a consumer electronic product, mobile phone design should serve functionality, and excessive showmanship is inappropriate. Smartphones, as a highly mature category, have long since simplified, with no one designing phones with unnecessary flip covers or adding a bunch of physical buttons. Except for the foldable form factor in recent years, the optimal form of straight-screen phones is essentially what we see today, with differences only in whether the camera is round or square, whether the R-angle is large or small, and whether the bezel is wide or narrow.

When innovation slows down, learning from the industry leader may not be the most correct choice, but it is at least not the wrong one.

02 The 'Curse' of Premiumization

The smartphone business is peculiar. Apple and Xiaomi represent two extremes: Apple takes 80% of the industry's profits, while Xiaomi, despite Lei Jun's extensive marketing efforts over the years, has meager profits, with cost-effectiveness becoming a long-standing issue.

2019 marked a turning point for domestic mobile phones to push into the premium market. A major variable at the time was Huawei, which, occupying nearly 40% of the domestic mobile phone market share, was sanctioned by the United States and lost support for the most advanced chips, leading to a severe decline in Huawei mobile phone sales. Although no one explicitly said so, there was a deep-seated hope to inherit Huawei's premium users.

However, the biggest variable came from the overall decline in the smartphone market. Domestic smartphone shipments peaked around 2017 and then entered a prolonged period of decline, with shipments in 2024 reaching less than 300 million units.

When the growth dividend disappeared, there were only two paths ahead: either explore new markets or improve existing operations.

In reality, most mobile phone manufacturers pursued both strategies. Besides entering the tablet and smartwatch markets, Xiaomi and Huawei ventured into the automotive sector, vivo bet on embodied intelligence and robotics, while OPPO and Honor's strategies were not particularly clear, though recently there have been rumors that OPPO plans to enter the action camera market.

In terms of existing operations in the mobile phone market, opportunities for growth through product innovation alone are diminishing.

Foldable screens have been a collective focus for manufacturers in recent years, with their innovative form factor once exciting the market. However, the penetration rate of foldable screens is not high enough to significantly impact overall market performance. In the first half of 2025, Chinese foldable smartphone shipments reached nearly 5 million units, accounting for only 3.5% of total market sales. Moreover, Huawei alone accounted for 75% of the market share in foldable screens.

AI is another concept that the industry has placed high hopes on in recent years. However, the reality is that AI is far from being able to widely influence user decisions. A survey conducted by the US tech media outlet CNET found that only 11% of US users would choose to upgrade their devices due to AI features. Last year, this figure was 18%.

In the domestic market, multiple mobile phone industry insiders admitted to Shuzhi Qianxian that AI phones are still more of a conceptual phase, with limited impact on sales. Since hyping up the concept of AI phones in early 2024, domestic mobile phone manufacturers have also taken the initiative to cool down the hype and returned to focusing on features like imaging and battery life that directly impact sales.

When the mobile phone market lacks fresh developments, it evolves into a zero-sum game. Almost all domestic mobile phone manufacturers have simultaneously embarked on a journey towards premiumization, hoping to achieve higher brand premiums by raising product positioning and pricing. The common target in their premiumization efforts is to capture a share of Apple's market.

Hu Baishan, vivo's Executive Vice President and COO, mentioned earlier this year that in the mobile phone markets priced above 4,000 yuan and 6,000 yuan, Apple occupies approximately 60% and 80% of the market share, respectively. For domestic brands to break through in these price segments, the largest source of users will come from Apple.

An interesting change is that in recent years, compared to the Net Promoter Score, more manufacturers are concerned about another metric—the iPhone conversion rate.

Data from QuestMobile shows that in 2019, the proportion of iPhone users switching to Xiaomi was only 3.2%, which increased to 6.1% by 2025. After the release of the Xiaomi 15, Lu Weibing revealed that approximately 20% of users came from iPhone. OPPO also once mentioned that over 40% of the online first-day buyers of the OPPO Find N5 were converted iPhone users.

iPhone users have become a rich source for domestic mobile phone brands in their premium transformation efforts, and how to attract this group has become an industry focus.

As we all know, the iPhone's continued leadership in the premium market is attributed to its top-notch hardware design and system experience, especially the iOS system, which has become key to retaining its core user base. The closed system experience allows the iPhone to achieve smoother performance than Android manufacturers with smaller memory and lower pixel counts for a long time.

In recent years, besides benchmarking against the iPhone in product and marketing strategies, OPPO, Xiaomi, vivo, and Honor have taken a noticeable action of actively ensuring compatibility with the Apple ecosystem. Through file transfer software, they enable file, image, and video transfers with Apple devices. At the same time, these manufacturers also support opening documents in Apple's special formats, attempting to create a breach in Apple's most fortified ecological stronghold.

03 Can Imitation and Benchmarking Lead to True Premiumization?

Undeniably, the industry's practice of benchmarking against Apple has shown effectiveness on the path to premiumization.

The market segment priced between 4,000 and 6,000 yuan has become a breakthrough point for domestic mobile phone brands in the premium market. In the first half of 2025, the top five domestic market players in this price segment were Huawei, Xiaomi, vivo, Apple, and OPPO, with the iPhone's share rapidly shrinking.

This effect is not only reflected in sales volume; the product strength of domestic mobile phones has also visibly improved in recent years. For example, while the industry still considers the iPhone to have a significant lead in video recording, domestic manufacturers have gained increasing recognition from users in terms of algorithm tuning and the application of large-size sensors in photography. Moreover, although the iPhone still maintains sufficient attractiveness in system optimization, many new technologies are first applied on Android phones before reaching the iPhone.

However, the frequent benchmarking against Apple by Xiaomi and other brands during product launches has also sparked disgust and skepticism among many. A representative critique is that Xiaomi has chosen the most insecure approach at a time when it should be the most confident. What the outside world sees is not Xiaomi's courage to challenge the world's number one but rather its eagerness for attention and trending topics.

Statistics show that during the Xiaomi 14Ultra launch event in 2024, the iPhone was mentioned 23 times; while during the Xiaomi 17 series launch event, Lei Jun mentioned the iPhone and Apple 37 times.

Not only Xiaomi but also vivo, OPPO, and Honor almost invariably mention and compare themselves to the iPhone during every launch event. In contrast, the iPhone never mentions its competitors during its launch events. This discrepancy raises a core question: Can domestic mobile phone brands achieve true premiumization through benchmarking or imitation?

Xiaomi first declared its intention to 'fully benchmark against the iPhone' at the Xiaomi 12 launch event at the end of 2021. Lei Jun stated, 'If Xiaomi lacks the courage and determination to benchmark against the iPhone, how can it make good premium phones?'

However, in the eyes of the outside world, Xiaomi should not be so preoccupied with formal benchmarking. Using internal motivational slogans as a means to influence user decisions appears very deliberate. During every launch event, Lei Jun's speeches are filled with displays of sincerity and emotional appeal, but this carefully orchestrated narrative has started to immunize an increasing number of people.

In an interview after the Xiaomi 17 launch event, Lei Jun expressed surprise at the public sentiment, stating that the intention behind renaming Xiaomi was to encourage people to see Xiaomi phones in a new light and change their fixed perceptions. However, Xiaomi's simplistic and crude approach essentially deepens stereotypes.

The commotion and hubbub generated by imitation and benchmarking amplify noise and divisions, leading to a growing sense of brand fragmentation. This fragmentation results in loyal fans becoming even more devoted, while the broader audience struggles to find sufficient identification and emotional value. However, if a brand cannot gain recognition from the general public, premiumization is destined to remain a celebration within a small circle.

Moreover, when 'benchmarking against Apple' becomes the core strategy, it is easy to fall into a passive position. In recent years, the iPhone has frequently used price reductions and other tactics to squeeze the market space of domestic mobile phone brands. If domestic brands cannot provide sufficient irreplaceability, they will ultimately find themselves in a passive position.

This dilemma is not unique to Xiaomi but also looms large over other domestic mobile phone brands. While benchmarking or imitating the iPhone can increase sales of premium product lines, true brand premiumization still requires a longer period of accumulation.

In the realm of kendo, a profound philosophy known as "Shu-Ha-Ri" prevails. The "Shu" phase entails the thorough mastery of established techniques. Moving on to the "Ha" stage, it involves the daring act of breaking away from traditional norms and refining existing techniques. Finally, the "Ri" stage represents the pinnacle, where one crafts their own innovative theory. Shifting our focus to the mobile phone industry, beyond the marketing fanfare, it's evident that domestic mobile phone manufacturers have achieved remarkable strides in key areas such as imaging capabilities, battery longevity, heat dissipation, and overall system experience. Nevertheless, the majority of them are still navigating through the "Ha" phase and have not yet forged a genuinely high-end methodology.