LINE

Text:AAAPrint
Business

Smartphone shipments fall 4%: IDC report

1
2015-05-12 08:59Global Times Editor: Li Yan

First drop in 6 years, shows increasing saturation

China's smartphone market contracted year-on-year for the first time in six years, U.S. market consultancy International Data Corp (IDC) said on Monday, signifying the world's largest smartphone market does not have too much room left for large growth.

In the first quarter of 2015, China shipped 98.8 million smartphones, down 4 percent from the same period in the previous year, according to a press release issued by IDC on its website on Monday.

"Smartphones are becoming increasingly saturated in China," Kitty Fok, managing director at IDC China, was quoted by the press release as saying.

The trend was reflected in a report released by China Academy of Telecommunication Research under the Ministry of Industry and Information Technology in mid-April, saying that a total of 32.08 million smartphones were shipped in China during March, down 7.2 percent year-on-year.

Some rival surveys such as Strategy Analytics showed continued growth in the Chinese market during the reported quarter but at a much slower pace than previously.

A survey by Strategy Analytics, also a US-based market research company, showed in late April that smartphone shipments in China grew 17 percent year-on-year to 109.8 million in the January-March quarter, slowing from its yearly growth rate of 39 percent in the previous year.

Analysts said that the slowdown in the country's smartphone market is largely due to the disappearance of first-time buyers in the market.

The smartphone penetration rate in China is 70 percent, Wang Jun, an industry analyst with Beijing-based market research firm Analysys International, told the Global Times on Monday.

"Starting from 2014, convincing existing users to upgrade to new smartphones is now the key to driving growth in China," said Wang, noting that China is now a replacement market.

That means that smartphone vendors in the market have to win over upgraders like Mao Xiaoyi if they still want to make a fortune.

The young lady uses an iPhone 6 Plus and usually replaces her old phones every two years.

"I might use my iPhone 6 Plus longer unless it breaks or slows down or if I find a more appealing replacement that has a better design and specifications than my current one," Mao told the Global Times on Monday.

Apple's larger-screen iPhone 6 lineup received a strong market reception in China, making the US phone maker overtake Chinese handset rising star Xiaomi Inc as the top smartphone vendor in the country during the first quarter, according to the IDC report.

Xiaomi slipped to second place with a 13.7 percent share of the market during the quarter, closely following Apple's 14.7 percent.

Despite this, Xiaomi still expressed confidence with its performance in home market.

"No matter what the big picture is, Xiaomi's smartphone sales will continue growing at a satisfactory pace in China," Li Lei, a PR manager with Xiaomi, told the Global Times on Monday.

With sales of 61.12 million units in 2014, Xiaomi expects to sell 80 million to 100 million smartphones globally this year, said Li.

Wang Yanhui, head of Shanghai-based Mobile China Alliance, told the Global Times on Monday that Apple might not be able to maintain its leadership in China in the following quarters.

"Apple's robust performance in the first quarter is mainly driven by the holiday season during China's Spring Festival. The second and third quarters are usually the slow periods for iPhones, as Apple fans wait for the sales of new products which often fall in October," said Wang.

South Korea's Samsung suffered a big slide in China, dropping to fourth place with a 9.7 percent market share during the first quarter of the year from top spot with a 19.9 percent share over the same period of 2014, according to IDC.

Samsung could not be reached for comment on this by press time.

The company was quoted by Wall Street Journal on Sunday as saying that it sees promise in China for its premium phone lineup such as new flagship Galaxy S6.

There are still 885 million mid- and low-end mobile phone users in China, leaving "plenty of room for upgrades to high-end phones," the Wall Street Journal reported, citing Samsung's statement.

But analysts said that Samsung will continue facing some headwinds in China amid fierce competition from larger iPhones as well as mid- and high-end products sold by local brands.

Competitive local brands including Xiaomi, Lenovo and Huawei are actively carving out their space for mid- and high-end smartphones to enhance their brand value, Wang noted. "Brand recognition is a crucial factor to win over consumers in an increasingly saturated smartphone market."

Related news

MorePhoto

Most popular in 24h

MoreTop news

MoreVideo

News
Politics
Business
Society
Culture
Military
Sci-tech
Entertainment
Sports
Odd
Features
Biz
Economy
Travel
Travel News
Travel Types
Events
Food
Hotel
Bar & Club
Architecture
Gallery
Photo
CNS Photo
Video
Video
Learning Chinese
Learn About China
Social Chinese
Business Chinese
Buzz Words
Bilingual
Resources
ECNS Wire
Special Coverage
Infographics
Voices
LINE
Back to top Links | About Us | Jobs | Contact Us | Privacy Policy
Copyright ©1999-2018 Chinanews.com. All rights reserved.
Reproduction in whole or in part without permission is prohibited.