World’s biggest smartphone market hits saturation as sales in China fall for first time

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World’s biggest smartphone market hits saturation as sales in China fall for first time

   Smartphone sales in China, the world’s biggest market, have fallen for the first time as the country’s authorities attempt to restore investor confidence in the rapidly cooling economy.

Sales fell 4 per cent year-on-year during the second quarter of 2015, according to research from Gartner. The fall contributed to the slowest worldwide growth since 2013, with around 330 million units sold globally during the second quarter, a year-on-year increase of 13.5 per cent.

Chinese economic uncertainty coupled with an increasingly saturated smartphone market caused the downturn, said Anshul Gupta, research director at Gartner.

“China is the biggest country for smartphone sales, representing 30 per cent of total sales of smartphones in the second quarter of 2015,” he said. “China has reached saturation — its phone market is essentially driven by replacement, with fewer first-time buyers. Beyond the lower-end phone segment, the appeal of premium smartphones will be key for vendors to attract upgrades and to maintain or grow their market share in China.”

Apple has continued to dominate the high-end of the smartphone sector, with iPhone sales increasing by 36 per cent during the three months to June, a 2.4 per cent increase in market share. South Korean rivalSamsung‘s premium Galaxy S6 and S6 Edge handset sales suffered as a consequence, as unit sales declined by 5.6 per cent, a 4.3 per cent loss in market share terms.

Other research firms recorded China’s smartphone sales falling in the first quarter of the year, which GfK attributed to a dramatic slowdown in demand for 3G which 4G growth failed to offset.

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China is home to 675 million unique mobile users – almost half of the country’s population – who are responsible for some 1.3 billion mobile subscriptions, according to We Are Social. The number of subscriptions is rising at around 8 per cent year-on-year, with an average of three new subscribers every second attributing to an annual growth of 94 million.

As the amount of people in China buying new smartphones plateaus and matures into an upgrade market, homegrown brands including Huawei, Xiomi and Lenovo will pursue Western markets more aggressively, according to Ben Wood of CCS Insight.

“China is the biggest area of concern for those tracking the smartphone market,” he said. “Following years of relentless growth, its evolving status as a replacement market combined with its economic challenges means it’s not quite the powerhouse it used to be.

“Competition between manufacturers for ever-valuable market share is likely to intensify even more, making life even more miserable for Sony, LG and HTC.”

China’s smartphone market has been the biggest in the world since overtaking the US in 2011. GfK predicts that India will overtake China at some point in 2015 to become the largest smartphone market in terms of growth by value.

Global mobile phone sales (including smartphone figures) totalled 446 million units during the quarter.

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Growing apathy towards smartphones is causing vendors to resort to increasingly outlandish features to act as a means of differentiation, he says. China’s slowdown has been echoed in similar economic weakness in Brazil and across surrounding Latin American territories, Wood said.

“It will be interesting to see if Apple will be able to continue staving off the general apathy and maintain high sales of its forthcoming iPhones expected next month.

Source: http://bit.ly/1MF6YEK

 

 

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