Major shake-up seen as Chinese smartphone market contracts for the first time ever
The world’s largest smartphone market has shrunk for the first time last year, with shipments down 4 per cent to 459 million units in 2017, according to research firm Canalys.
China’s consumers bought fewer smartphones last year, the first time that the world’s biggest market has shrunk and a harbinger of more intense competition as handset makers fight for sales in a saturated market.
Smartphone shipments fell 4 per cent to 459 million units in 2017, dragged down by a weak fourth quarter, according to Canalys, the industry research firm. Huawei Technologies maintained its No. 1 ranking, with Oppo and Vivo coming in second and third, respectively, while Apple overtook Xiaomi to take fourth place.
The decline in overall market shipments is providing added impetus for Chinese smartphone brands to step up their overseas expansion. One of those countries is India, where about one in every two smartphones sold are made by Chinese manufacturers and Xiaomi seized the sales crown from Samsung.
“The declining Chinese market will have a detrimental impact on those Chinese vendors that have been heavily relying on their home market,” said Hattie He, an analyst at Canalys Research. “It will affect their cash flow and profitability, limiting overseas expansion and bringing into question future survival. The threat to vendors such as Gionee and Meizu is now closer than ever.”
Smartphone sales in China doubled each year between 2010 and 2012 before slowing down in 2013.
Looking ahead, the pace of new phone launches is set to slow further in China, with the industry regulator receiving 17 per cent fewer registrations for new 4G smartphone models in the last quarter.