Analysts have warned us for some time that China’s smartphone market is shrinking, and today we have the most compelling evidence that buyer dynamics are shifting in the country. A new report from IDC claims that smartphone shipments in the last quarter decreased for the first time in nine years.
The research firm tracked 98.8 million smartphones shipped during Q1 2015 — that’s down 4 percent year-on-year and 8 percent on the previous quarter. IDC suggested that excessive inventory from the previous quarter was partly to blame. (That’s something we heard in India earlier this year.)
“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 U.S., UK, Australia, and Japan,” said IDC’s Kitty Fok in a statement.
As a result, smartphone makers will have a tougher challenge finding new growth since they will need to convince existing smartphone owners to fork out money to upgrade their current device. That’s far harder than converting a first-time buyer.
Nonetheless, China’s smartphone market remains huge. The largest in the world. Unsurprisingly, given its blockbuster last quarter in China, Apple took the top spot in the country, according to IDC.
The firm put Apple ahead with 14.7 percent of the total shipments in China, just ahead of Xiaomi (13.7 percent) and Huawei (11.4 percent). Samsung (9.7 percent) and Lenovo/Motorola (8.3 percent) rounded out the top five. However, IDC cautioned that “the volatility of consumers’ brand preference” means the rankings will be subject to rapid change and evolution.
To illustrate that point, we can cast our minds back to the previous quarter — Q4 2014 — when Xiaomi edged out Samsung as China’s top smartphone vendor, according to IDC. Just three months later and Samsung is down to fifth, and Apple up to first.
IDC said Chinese consumers “still have a strong appetite” for the larger screens of Apple’s iPhone 6 and iPhone 6+, but it remains to be seen whether Apple can continue to ship marketing-leading volumes as we move past the ‘halo’ period of the iPhone 6 launch. In addition to its larger form factor, availability via all three carriers has been a key factor in helping the iPhone 6 make waves in China — but has Apple tapped out most of its core market in the country already?
It will also be interesting to see how Samsung’s new Galaxy S6 and S6 Edge fair in China. While Xiaomi launched the Mi Note Pro, its most expensive (and impressive) smartphone to date, earlier this month.