Phones on silent everyone: China is buying fewer smartphones. Apple had a bumper year off the back of shifting millions of iPhone 6s out east, but it looks like the growth of the market is finally past its peak.
The number of smartphones shipped to China fell 4% year-on-year to 98.8 million in the first quarter of this year, according to research firm IDC, the first contraction in six years. On a quarterly basis, the figure was down 8%.
After the flop of the cheaper iPhone 5c, Apple has now leapfrogged multibillion-dollar startup Xiaomi to become the market leader, its 14.7% share up a tasty 62.1% from 2014. Xiaomi’s growth of 42.3% wasn’t half bad of course, while fellow homegrown rival Huawei shifted 39.7% more units.
The biggest loser in the world’s biggest smartphone market was Samsung, whose shipments plunged 53%. Another of last year’s one-time market leaders was Lenovo, whose purchase of Motorola didn’t stop it shipping 22.1% fewer phones.
In such a volatile, fast-changing market neither Apple nor Xiaomi can afford to be complacent. And it’s not about winning virgin smartphone users anymore.
‘China is oftentimes thought of as an emerging market but the reality is that the vast majority of phones sold in China today are smartphones, similar to other mature markets like the US, UK, Australia, and Japan,’ IDC China managing director Kitty Fok said. ‘Just like these markets, convincing existing users as well as feature phone users to upgrade to new smartphones will now be the key to further growth in the China market.’
The bigger danger, though, is that the slowing Chinese economy stutters further and even grinds to a halt. Then Xiaomi’s cut-price models might really come into their own.