Two known smartphone companies have been dropped from the top five list of smartphone makers.

On April 27, research firm IDC reported a slight increase in smartphone shipments worldwide during the first quarter of 2016 compared to the same period a year earlier, with vendors shipping a total of 334.9 million.

A significant highlight of the report's top five vendor standing is how two lesser-known Chinese brands, Oppo and Vivo, displaced Lenovo and Xiaomi from their fourth and fifth positions, respectively.

IDC reports that Oppo's growth is the strongest among the top five with a 153.2 percent rate year-over-year and total shipments of 18.5 million units in Q1 2016.

While its main focus is domestic, the company has been shipping since 2012 to destinations in Asia, the Middle East and Africa, with 20 percent of its shipments going out of China in 2015. Oppo's expansion in China focused on a strong push to smaller cities via offline channels.

Unlike Oppo, Vivo has been more focused on domestic markets, primarily relying on its strong retail presence in lower-tier markets as a key factor for its growth. Its best-selling product, X5Pro, is considered as a relatively premium product in China and one of the most expensive at around $300.

The company entered the Southeast Asian and Indian markets in 2014, and by 2015 had shipped less than 10 percent of its products to these regions. Vivo posted shipments of 14.3 units in Q1 2016, with a 123.8 percent year-over-year growth rate.

It's a surprising change for Lenovo, which, together with its subsidiary Motorola, has a high profile in global markets. Xiaomi had been positioning itself for a big break, but that did not happen. IDC's latest figures suggest that both companies were aligning themselves in markets that were more tenuous than they may have seemed.

The report also highlights the fact that the smartphone market in China, the world's biggest market, has begun to mature.

"China has reached saturation — its phone market is essentially driven by replacement, with fewer first-time buyers. Beyond the lower-end phone segment, the appeal of premium smartphones will be key for vendors to attract upgrades and to maintain or grow their market share in China," said Anshul Gupta, research director at Gartner, a tech research and advisory firm.

The implication is that Chinese consumers now want more value out of what they are willing to spend. While buyers are gravitating around moderately priced phones, they are willing to explore upstream and pay more for novel functionalities.

In a possible move to recover lost ground, Xiaomi recently launched Xiaomi Mi 5, an alarmingly smart smartphone at an alarmingly moderate price. Motorola is reportedly mulling a similar undertaking to reverse its fortune.

Meanwhile, Samsung maintains its lead with 81.9 million shipments and a 24.5 percent market share. Apple stays in second place with 51.2 million shipments and a 15.3 percent market share while Huawei comes third with 27.5 million shipments and an 8.2 percent market share.

Photo: Cheon Fong Liew | Flickr

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