China's shipment in mobile phone market saw a 17.8 percent drop in the first half year, falling to 196 million units, of which 176 million came from domestic brands, or 89.6 percent of the total shipment, according to a report released on Monday.

China Academy of Information and Communications Technology, a scientific research institute directly under the Ministry of Industry and Information Technology, said in the report that newly issued models fell 30 percent year-on-year to 397 during Jan-June period. The sharp decline in new models also led to falling shipment, China Securities Journal said.

The newspaper cited industrial veterans saying that mobile phone sales have gone to the stage where customers want more exquisite handsets with significant functional upgrades or innovative applications. Bottleneck in technological innovation, product homogeneity and lower replacement ratio have resulted in shipment decline, it said.

According to data from ZDC, an internet consumption research centre, mobile phone makers competing in Chinese market totaled 118 in 2017, down from 134 in 2016. And top 5 brands occupied nearly 70 percent of users' attention, while domestic brands — Huawei, Oppo and Vivo - took up 18.45 percent, 13.61 percent and 12.98 percent, respectively, netting the top three spots, while Apple and South Korea's Sumsung took the fourth and fifth spots.

ZDC said that competition in mobile phone market globally, as well as in China, will be more intense this year, as the growth rate falls into a slow rise phase. However, it added that top brands, which hold more market share and strong capability of research and development, will be stronger; on the contrary, small players will face more challenges to survive.

Outside of China, Huawei is growing and gaining market share across the Western Europe region, and is particularly strong in Spain, Germany, and Italy, international information provider IDC reported in May, adding the company also launched its Honor brand in a couple of markets in Southeast Asia.

Also, Xiaomi recorded strong performance in the international market, as data from IDC showed that less than half of its shipments were domestic in the first quarter of 2018; and Oppo's both share and shipment volumes abroad increased from Jan-March, according to IDC.