The smartphone market in China saw a 19% on-year growth and 17% quarterly growth in the fourth quarter of 2016, according to IDC. For the full year of 2016, the market grew by 9% with top Chinese smartphone vendors taking up a larger share of the market.

The four Chinese vendors in the top five were the same as those in 2015, and their share grew from 46% in 2015 to 57% in 2016. This shows the growing local acceptance of Chinese vendors in its home country with the improvement in product features and better marketing messages seen in the past year, said IDC.

Increased dependence on mobile apps has prompted consumers to seek phone upgrades, helping drive the large growth in fourth-quarter 2016. In lower-tiered cities, there was a similar demand by consumers, which Oppo and Vivo met by aggressively pushing mid-range smartphones in these cities, said Tay Xiaohan, senior market analyst with IDC Asia/Pacific's Client Devices team.

2016 was the first time ever that Apple saw an on-year decline in the China market, according to IDC. Even though the new black-colored iPhones caught the attention of consumers, overall, the new launches did not create as much of a frenzy compared to the past. Despite the decline, IDC does not believe Chinese vendors have actually eaten away Apple's market share. Most Apple users are expected to be holding out for the new iPhone that will be launched this year, and that will help the brand see growth in 2017. Apple's 10-year anniversary iPhone will also likely attract some of the high-end Android users in China to convert to the iPhone.

A key trend that stood out in 2016 was the slowdown of the growth of the online channel in China. There is no longer a single channel that is seeing exponential growth for smartphones unlike previous years. Most brands are now using a combination of channels to increase their shipments. Xiaomi, previously focused on online channels, has opened more Mi Home stores to drive offline growth. Apple has also been aggressive in increasing its offline retail presence. Some vendors outside the top-five vendor list in 2016, such as Gionee, also saw good growth in 2016 due to expansion in the offline channel in the lower-tiered cities.

Top vendors will continue to take up a larger share of the market while smaller brands will begin consolidation., said IDC. Chinese vendors will continue to focus on their international expansion plans. At present, out of the top three Chinese vendors in China, Huawei is the most successful with half of its shipments coming from markets outside China in fourth-quarter 2016.

Chinese vendors are starting to launch phones with dual cameras and curved screens, IDC said. Cameras will continue to be a key focus in the marketing messages by vendors especially given the strong selfie culture in China, as exemplified by the popularity of apps such as Meitu.