China returns shaky quarter for smartphones in Q4 2013

The China smartphone market has experienced its first slowdown in Q4 of 2013 after nine consecutive quarters of explosive growth which had made the country the top smartphone market in the world.

According to the International Data Corporation (IDC) Asia/Pacific Quarterly Mobile Phone Tracker, China shipped fewer units than in the previous quarter: 90.8 million units compared to 94.8 million in Q313, a decline of 4.3% quarter-on-quarter. 

“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,” says Melissa Chau, Senior Research Manager with IDC Asia/Pacific's Client Devices team.

“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.”

The research firm said that with mature Asia Pacific (excluding Japan) markets already having hit market saturation and China growth facing more moderate increases, two trends will become more prominent.

First, growth will increasingly shift to other emerging markets. While India volumes significantly lag China, India was the third-largest smartphone market in the world in 2013, surpassing Japan, the United Kingdom, South Korea, Germany and France, which were all ranked higher in 2012.

Second, Chinese phone players which have previously been content to make their mark on the China market itself are looking to expand their ambitions overseas. While this trend has started already through 2013, IDC expects it to become more common in 2014.

“Chinese players are getting hungrier to turn themselves into international rather than China-only brands. Nowhere is this more clear than Lenovo’s acquisition of Motorola’s handset business, and even smaller players, some unknown to much of the world, like Oppo, BBK, Gionee and of course Xiaomi are ramping up on international expansion,” said Chau. 

Xiaomi is reportedly coming to Singapore as early as next week. 

Asia/Pacific (Excluding Japan) Smartphone Shipments by Sub-Region, 2011Q1-2013Q4

Notes:

·        Mature markets include Australia, Hong Kong, New Zealand, Singapore and Taiwan

·        SEA markets include Indonesia, Malaysia, Philippines, Thailand and Vietnam

Source: Asia/Pacific Quarterly Mobile Phone Tracker, February 2014