Smartphone fatigue setting in

Published on 05/02 2018  Source: China Daily


Shipments decline 21% in Q1; Xiaomi, Huawei maintain growth momentum 

The growth momentum of the world's largest smartphone market has come to an end, as Chinese smartphone shipments declined by more than 21 percent year-on-year in the first quarter of this year, the biggest drop since 2013. 

According to research firm Canalys, Chinese smartphone shipments decreased to 91 million units in the first quarter of this year, which rarely happens to a market of which the shipments often surpass 100 million units. 

Jia Mo, an industry analyst from Canalys, said the market is suffering from fatigue as fierce competition has forced vendors to imitate their competitors' products, either in portfolios or go-to-market strategies. 

Despite the overall market dip, Xiaomi Corp bucked the trend, reporting a growth in shipments of 37 percent to 12 million units in the first quarter, beating Apple Inc to take fourth place in the Chinese market. 

Huawei Technologies Co Ltd also maintained its leading position in the domestic market. Its shipments grew a modest 2 percent to more than 21 million units and accounted for about 24 percent of total market share. 

"The Chinese market is now driven by replacement users, most of whom have already upgraded their handsets. Xiaomi and Huawei's increases showed that they have succeeded in grabbing the market share of these users," said Li Junhui, senior research fellow at the Center for IPR Studies at the China University of Political Science and Law. 

Analysts added that Xiaomi is the only top-five vendor that is focused on low-price smartphones, with some below 1,000 yuan ($160). 

"The market continues to consolidate and the scale of these top vendors will help them last longer than other smaller players. Huawei, Oppo, Vivo and Xiaomi will benefit from the integrated Chinese market in the long term." Jia said. 

However, Jia is optimistic about the Chinese smartphone market, saying that it is expected to return to growth in the second quarter of this year. 

"China is expected to grow in the next quarter, as Oppo, Vivo and Huawei have launched new flagship devices with the aim of exciting the market once again," Jia said. 

Jia added that new smartphones will entice people to upgrade but vendors are becoming careful to avoid oversupply. 

"China's smartphone market may see a short period of stagnation with vendors refocusing on research and development, relying on new use cases to excite interest rather than spending heavily on the channel and marketing," he said. (Source: China Daily)