(Reuters) – Smartphone shipments in China fell to between 12-15.5 percent last year, market data indicated, suggesting a gloomy outlook for the sector at a time when the giants Apple and Samsung Electronics have already issued dour forecasts.
FILE PHOTO: Mobile phones are seen on display at an electronics market in Shanghai, China, June 24, 2015. REUTERS/Aly Song
China Academy of Information and Communication Technology (CAICT), a research institute under the country of the Ministry of Industry and Information Technology, shipments decreased by 15.5 percent to approximately 390 million units for the year, with a 17 percent decrease in December.
Market research firm Canalys estimates shipments fell 12 percent in China last year and expects smartphone shipments in 2019, dive amongst the 400 million for the first time since 2014.
The Chinese smartphone market, the world’s largest, may shrink 3 percent this year, Canalys said, what would a third consecutive year of decline. Smartphone shipments in the country fell 4 percent in 2017.
Shipments are the number of smartphones that manufacturers provide to retailers and carriers, different sales that happen when customers actually buy these smartphones.
Dip in the Chinese shipments expected in 2018 could lead to a 1 percent contraction in the global smartphone market, Canalys said.
Apple has led to a selloff in the global markets last week after it took the rare step of cutting its quarterly sales forecast citing slowing iPhone sales in China.
China boasts the world’s largest smartphone market, but a slowing economy, exacerbated by a trade war with the United States, has shown that the demand for gadgets drop in the tech sector.
TuanAnh Nguyen, a Singapore-based analyst for Canalys, told Reuters that China is now a fully mature market and extend refresh cycles for smartphones would be the new normal.
“Weaker economic growth and lower consumer confidence will likely hit the premium segment in the first half of the year 2019,” Nguyen said.
“Apple was definitely the biggest victim of this trend, with the added effects of the fact that it is a disadvantage of local competitors in innovation and an attractive price,” he said.
Apple competitor, supplier of Samsung on Tuesday estimated that fourth-quarter profit fell 29 percent and its profitability would be limited in the current quarter due to weak demand for memory chips.
Also Samsung’s display business is struggling because of the lack of growth of the own devices, and worse-than-expected performance of Apple’s X/XS/XS Max iPhone series, Nguyen said.
The Chinese companies Huawei and Xiaomi challenging Samsung’s dominance in many markets, he added.
Huawei dominates the Chinese market, where the industry-leading Korean company is now almost a bit player.
Samsung controls more than a fifth of the global market, followed by Huawei, who has a 14-percent market share, Canalys said.
Reporting by Sayantani Ghosh in Singapore and Adam Jourdan in Shanghai; Editing by with the ipad has Himani