Opportunities in China’s smartphone market are shrinking with domestic smartphone shipments hitting a new low at 14 million units in February, down 20.1% from the previous year.
The market contraction trend that’s become apparent since last year suggests that smartphone makers’ best days are behind them in China, industry observers have said.
Liu Ruofei, a telecoms analyst at CCID Consulting in Beijing told KrASIA that despite efforts to introduce new features and designs to lure new customers, they might face difficulties in the short-term as the world’s largest smartphone market is saturated. “Mobile phone penetration rates have long exceeded 100% and customers are less likely to upgrade their handsets as frequently as before,” he said.
But the country’s plan to upgrade its networks to 5G might bring relief to phone makers. “The construction of 5G networks is underway this year,” Liu said. “It will bring growth to the market and we might be seeing more shipments in 2020.”
All three major Chinese telecoms networks – ChinaMobile, China Unicom, and China Telecom – have announced their plans to roll out 5G services by 2020.
According to the China Academy of Information and Communications Technology, 5G networks will reach 4 million Chinese users by 2020.
Editor: Nadine Freischlad