China’s smartphone market may be the world’s largest, but the country posted its first decrease in shipments in more than two years during the final three months of last year.
That’s according to a new report from IDC, which claims 90.8 million smartphones were shipped during Q4 2013, down 4 percent from 94.8 million in the previous quarter. That’s notable because shipment numbers in China have surged thanks to nine successive quarters of growth.
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Before we start proclaiming that China’s smartphone revolution has peaked, it’s important to bear in mind a few caveats. China Mobile, the world’s largest carrier, recently switched on its 4G network. Compatible devices are not expected to arrive until early 2014, so the launch of the 4G network may have affected shipments numbers during the final stages of 2013.
While IDC believes that the dynamic is shifting in China — rising smartphone adoption means many people already own a device, presenting a different sales challenge for OEMs and operators — it is bullish that the market is not tapped out, and will continue to grow in the future:
The world has increasingly looked to China as the powerhouse to propel the world’s smartphone growth and this is the first hiccup we’ve seen in an otherwise stellar growth path.
There will certainly be future drivers to unlock further smartphone growth in China, as Apple demonstrated with its China Mobile tie-up in January, and the massive device migration to come of phones only supporting 2G and 3G networks to devices supporting 4G networks. However, we are now starting to see a market that is becoming less about capturing the low-hanging fruit of first time smartphone users and moving into the more laborious process of convincing existing users why they should upgrade to this year’s model.
It remains to be seen if China’s smartphone numbers have peaked, but what is beyond doubt is that the country’s phone-makers are already exploring overseas markets for growth.
Among them, Lenovo is the process of buying Motorola from Google, Huawei has become a top five vendor on market share, while Xiaomi hired a top Android executive and is exploring international waters.
Meanwhile, other markets in Asia are maturing, albeit at a slower rate than China.
IDC ranks India as the world’s third largest smartphone market, though its smartphone shipment volumes “significantly lag China”. Southeast Asian shipments are also growing at a steady rate, fueled by cheap Android devices.
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