China-based smartphone vendors have become more conservative about placing orders for parts and components for the fourth quarter of 2016 due to concerns of rising inventory levels and uncertainty due to competition, according to Taiwan-based supply chain makers.

China's smartphone vendors have seen their inventory levels continue building up in the domestic and overseas markets as they have been striving to maintain market share under fierce competition, said the sources.

Current inventories for entry-level smartphones are particularly higher in China as most vendors, including Huawei, Oppo, Vivo, Xiaomi Technology, Meizu, Gionee and LeEco have been introducing more entry-level models to ramp up sales as well as market share, said the sources.

Apple is expected to see its market share in China and other markets rebound in the fourth quarter thanks to the release of the iPhone 7-series, which in turn will add more pressure on China-based vendors, commented the sources.