Apple and Android Phone Sales Fall in China’s First Quarter
In the first quarter of 2022, Apple and Android smartphone sales fell as Chinese consumers continued to tighten their belts after COVID-19 restrictions were lifted. According to research firm Canalys, the iPhone maker was the best-selling brand in the quarter but its overall shipments fell by 3% from the previous year to 13.3 million units.
Apple’s 20% market share was the highest, but its total market share fell by 3 percentage points for the year. Other top-selling brands also experienced a drop in sales, with total smartphone shipments falling 11% YoY to 67.2 million units, the lowest quarterly total since 2013.
Even Android brands Oppo and Vivo, which trail Apple as the second and third best-sellers respectively, saw shipments fall by 10% and 7% respectively. Honor and Xiaomi Corp, which specialize in low-end smartphone models, saw shipments fall by 35% and 20%, respectively. This suggests that consumers are refraining from buying phones even at the cheapest prices.
China’s First-Quarter GDP Growth and Future Economic Expectations
Despite this drop in smartphone sales, China’s GDP grew by 4.5% in the first quarter, surpassing expectations. Policymakers in Beijing are also developing plans to further stimulate demand. However, economists believe that most Chinese consumers and businesses will remain cautious in their spending this year.
Factors Contributing to the Sales Slump in China’s Smartphone Market
There are several factors believed to have contributed to the drop in smartphone sales in China’s market. The COVID-19 pandemic significantly hampered economic growth, leading to widespread job losses and pay cuts. Consumer confidence has also been impacted by its impact on the global economy and the resulting uncertainty regarding future economic stability. Additionally, the rise in popularity of gaming on mobile phones has led to consumers holding onto older models for longer periods.
The Impact of Rising Smartphone Prices on Sales in China
Rising smartphone prices have also impacted Chinese consumers’ buying habits. Given that most high-end smartphones are designed and manufactured by companies headquartered outside of China, such as Apple and Samsung, the increasing cost of these devices has led to Chinese consumers opting for cheaper alternatives. Competition from Chinese brands such as Xiaomi and Huawei, which offer lower-priced phones, has intensified as well. Additionally, the Chinese government’s crackdown on unregulated game apps has led to decreased demand for high-end phones used primarily for gaming.
The Economic Outlook for China’s Smartphone Market in 2022
Despite the unfavorable conditions currently affecting China’s smartphone market, Canalys remains optimistic about its future growth potential. The company predicts that 5G adoption will increase in China, making it a key driver of future growth. Additionally, Canalys expects more Chinese companies to turn to local manufacturers, such as BOE Technology Group, to reduce costs and increase profits. It also suggests that companies that offer lower-priced or mid-range devices that compete with premium brands like Apple and Samsung may fare better in the near future. Finally, Canalys believes that although the smartphone market in China may experience ups and downs in the coming years, it remains a key player in the global smartphone market.
The COVID-19 pandemic and its aftermath continue to impact China’s smartphone market, leading to a decrease in sales for Apple, Android, and other smartphone brands. Rising prices, a shift in consumer preferences, and increased competition from Chinese brands such as Xiaomi and Huawei have all contributed to the market’s slump. Nevertheless, Canalys predicts that new technologies such as 5G, local manufacturers, and lower-priced devices will help drive growth in the future, and the smartphone market in China remains important in the global market.