China sees its first smartphone shipment decrease in six years

iPhone-6

According to International Data Corporation (IDC), smartphone shipments in the last quarter decreased for the first time in six years in China, one of the largest and most contested markets in the world. IDC’s latest Mobile Phone Tracker shows that China’s smartphone market decreased by four percent year-on-year. The market decreased by eight percent quarter on quarter. IDC says that in the first quarter of 2015, about 98.8-million units were shipped.

The IDC report also echoes Apple’s financial result a few weeks ago which showed that iPhone 6 and iPhone 6 Plus are the most shipped smartphone in China. Apple’s surge in China, according to IDC, as alluded to in other reports too, is that there is a huge interest in big screen smartphones.

Apple is followed by Xiaomi, which moved into second position, continuing to cement its position against strong opposition. Huawei remained in the third spot as it too experienced a good uptake in the mid-range segment. It is however not very good news for Samsung, currently sits in fourth position above Lenovo, despite both having occupied top spot at various times last year.

Read more: Mobile adspend set to top $105bn by 2019

IDC data

Kitty Fok, Managing Director at IDC China said that these results say a lot about China as a market:

“Smartphones are becoming increasingly saturated in China. 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. 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.”

IDC expects flat growth in the year 2015 in China but points out there will be other trends to expect. These areas include multi-brand strategies, higher price tier competition, non-traditional channel strategies and expansion into overseas markets. Xiaomi is yet to expand to the US market and should it do so in 2015, and get a warm reception, it might influence its performance in China.

“To successfully combat local players overseas, Chinese vendors will need to focus on channel relationships and localized marketing strategies,” said Tay Xiaohan, Senior Market Analyst with IDC Asia/Pacific’s Client Devices team. “Most of the market’s growth will come from sub-US$150 phones as feature phone users switch to low-cost smartphones.”

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